Types of Credit Card Declines
Similar to how a transaction is approved, when a credit card is declined, it is declined by the issuing bank, as they are the entity that decides the outcome of the transaction, not the processor or the card network.
Most issuing banks do not provide a detailed reason for the decline to avoid fraudsters from “testing” credit cards and trying to determine the reason for the decline. Card brands recommend that you do not try a card more than twice if you get a decline message, instead ask the customer for another form of payment. If you get a decline notice, there are a few primary reasons that are most likely the cause:
Declined - Invalid Card
When you receive an Invalid Card error, it means that the system has completed a MOD10 check, the checksum formula used to validate a variety of identification numbers, and the formula was unable to validate the card numbers, meaning the card you entered is invalid. This is usually because the credit card number was entered incorrectly.
Declined - Expired Card
If a customer has a card that has passed the expiry date listed on the front, then the card network won’t be able to process it and they will need to present an alternate payment method or provide the updated expiry date.
Declined – ND
If you receive this message, then it is a normal decline by the bank. The most common reasons for a Declined – ND message are due to insufficient funds or a restriction placed on the card.
Declined - Call For Auth
This is also a decline, but there is a pathway for a potential approval. In this case, the bank is unsure about the transaction and would like the merchant to call the processor’s call-for-auth center to do further verification on the transaction. If approved over the phone, the call center agent will provide you with an approval code for the capture.
Declined - Suspected Fraud
If a card is declined due to suspected fraud, the customer's bank has flagged the transaction as suspicious. The transaction may indeed be fraudulent, or this decline may be due to valid reasons such as a large purchase being made outside of your customer's typical spending habits. In this case, it is recommended that the customer reach out to their bank to verify their identity and confirm that the transaction is legitimate.
Declined - Pick Up Card
This decline means that you should actually pick up the card if you are in the physical presence of it. Think of movies where the waiter takes scissors and cuts the card in front of the customer. This is because the card has been taken out of circulation, either because it was lost and has been replaced, or was reported stolen. While not a certainty, this can be a warning sign that a customer is trying to process a fraudulent transaction using a stolen card. It should be noted that a merchant should never compromise their safety in trying to repossess a credit card.
Tips for Dealing with Declines
Don’t try processing the credit card multiple times. You will continue to receive decline messages, and your merchant account may be flagged for potential fraud or abuse. Instead, ask the customer for another payment method.
Try to avoid processing the credit card for a smaller amount – this may be seen as “testing” the card limit, and the transaction may be flagged for fraud. Instead of trying the transaction again, ask for another payment method from the customer.
For international transactions, some credit cards can have restrictions by default to decline all international payments. In this case, the customer would need to call their issuing bank (the number can be found on the back of the card) and let them know they are trying to process an international transaction. The bank will “unlock” the card, and the merchant can try processing it again.
Some credit cards, especially business and corporate cards, can have restrictions on the type of purchases that can be made. Each merchant account has a SIC (standard industry code) associated with it, and a specific SIC could be prohibited from charging certain types of cards. In such an event, the cardholder again would need to contact their issuing bank to unlock the card before the merchant can try processing the transaction again.