Guy Raymond El Khoury and Simon Bradley, Founders of Accomplish Financial, share their years of expertise in credit card development to explain why a card can be declined.

In a previous article, Fear of rejection: Why a credit card is declined reasons were given for the failure of contactless or chip and PIN transactions. This article examines why card transactions over the internet or phone might also fail. 

The internet challenge

“When you use a card to make purchases online or over the phone, there are a whole different set of challenges,” says Guy Raymond El Khoury, Founder of Accomplish Financial. “The most common is entering the wrong security code or CVV. The merchant will check whether the card number is valid, but the card will be rejected if the wrong CVV or expiry date is entered.”

Another error could be that the address given does not match the details for the card. Each small detail can count regarding the security of a card and the chances of a transaction being approved or declined.

There is also the matter of the merchant’s technology or services provider not being up to date, in which case, they may reject certain card types as they do not know how to handle them or know how to evaluate the risk. With the issuer having a higher standard of fraud protection than the merchant, this makes it difficult for the merchant to process the transaction. Merchants do not want to be liable for fraud, so even though they may be required to accept all transactions, they occasionally refuse to do so.

3D Secure

“There are also cases where the merchant misconfigures a card transaction message when sending it to the issuer, which makes it difficult for the issuer to tell whether these are genuine transactions initiated by the cardholder. This can lead to the transaction being rejected,” says Simon Bradley, Head of Partnerships at Accomplish Financial.

He explains, “More sophisticated merchants will support the latest technology in fraud prevention, such as 3D Secure. This is when a window pops up from the card issuer asking the user for verification. What can happen here is that the 3D secure credentials may have been forgotten, or the onscreen bank verification instructions have not been properly followed.”

El Khoury adds, “Very rarely, ad blockers and certain pop-up blockers on a browser may also affect the functionality of the 3D Secure process. If this does happen, it doesn’t mean that these ads and pop-up blockers have to be turned off. Instead, the 3D Secure process can be whitelisted, so these browser plugins do not accidentally block it.”

One size does not fit all

Merchants also run anti-fraud systems of their own, which may accidentally trip this system for various reasons. If, for instance, a user is trying to purchase something on the internet, the merchant can see that the country does not necessarily match the shipping address or the address of the account.

“Some merchants will also check the card before they bill it when the goods are ready to ship, but this process can vary from merchant to merchant,” explains Bradley. “This validity check may appear to the issuer as an attempt at an unconventional transaction or fraud attempt and may be accidentally blocked if the issuer has not seen this attempt before. For instance, some merchants will simply check a card’s validity with a transaction for 0.00, where others may check for amounts between 0 and 1, which may appear suspicious to the issuer.”

Spend limits

By informing the issuer in advance that the user will be on holiday or going over their normal spending limits, these problems can be avoided.

Cultural blocking

This falls under the category of forbidden merchant, where certain types of purchases are forbidden for legal or ethical reasons. Commonly blocked categories here, for instance, could be gambling or alcohol-related. Once again, an issuer would have to be prewarned.

“Awareness of these possibilities gives a user a better chance of not being in the embarrassing situation of a card transaction being declined and any awkward shopping or dining moments,” concludes Bradley.