While a declined payment might appear insignificant on the surface, for small businesses, a single failed payment could spell disaster. It could potentially result in loss of earnings, additional work, delayed payments, or disgruntled customers that won’t return. Thankfully, there are methods through which a large number of declined payments can be minimized.
Why Payments Get Declined
Payments could be declined based on various factors such as the card having expired, exceeded its limits, being lost, or having a billing address and verification code that does not match that of the bank’s records. An online transaction may also fail due to suspicion about the authenticity of the client involved.
Merchants will thus need to determine how to differentiate between payments that have been declined unnecessarily and those that cannot be avoided. This is where payment technology comes in.
Use Smarter Payment Routing
Payment routing is critical to determining how a transaction travels from your organization to the payment processor, network, and bank of the cardholder. When this process is not optimized, some of these transactions may not necessarily be declined.
Using payment routing intelligently ensures that payments follow the most efficient route depending on things such as the type of card being used, geographical location, and the performance record of the transaction in terms of its approvals. This can go a long way in benefiting ecommerce companies, companies that offer subscriptions, and those who handle many transactions.
Balance Fraud Protection with Customer Experience
However, while fraud prevention is key, stringent fraud settings can actually do more harm than good. Overly stringent fraud filters could potentially prevent genuine customers from placing an order, causing what is known as a false decline, which could be costing your business revenue.
Merchant services for small businesses should evaluate their current fraud settings in consultation with their merchant services company. Address Verification Services, CVV verification, fraud monitoring, and artificial intelligence fraud detection are among the tools that can be utilized.
Make Checkout Simple
Good checkout processes are also key factors in boosting approval rates. Make sure to keep payment forms short and convenient for mobile phones, use online wallets where you can, and always reassure clients about security.
When payment process is easy, there will be less errors from clients.
Small Improvements Can Add Up
Raising the rates of payment approvals cannot be achieved through a single solution. Instead, it requires using more intelligent routing, effective fraud controls, fresh card information, and an improved checkout process. For small companies, such changes could mean increased revenues, improved financial performance, and satisfied customers.
