Credit Card Decline Messages: What They Mean, and How Recurly Responds

posted in:
Billing

“Insufficient Funds”, “Invalid Card Number”... phrases that merchants fear most. Especially the mysterious, ambiguous “Declined”.

These are messages that accompany a declined credit card. But the decline is not the end of the road for merchants using Recurly. Our service automatically retries many failed transactions. These retries are frequently successful, recovering otherwise-lost money and preventing subscribers from churning.

A successful retry depends on many factors, including the decline message. Of the dozens of decline messages we see, these are the most common:


Decline Message

Your Customers See This Message

You See This Message

Insufficient Funds

The transaction was declined due to insufficient funds in your account. Please use a different card or contact your bank.

The card has insufficient funds to cover the cost of the transaction.

Declined

Your card was declined. In order to resolve the issue, you will need to contact your bank.

The customer's bank has declined their card. The customer will need to contact their bank to learn the cause.

Temporary Hold

Your card has a temporary hold. Please use a different card or contact your bank.

The issuing bank has a temporary hold on the card. This is known as a 'Do Not Honor' response.

Fraud Stolen Card

The transaction was declined. Please use a different card or contact your bank.

The card has been designated as lost or stolen; contact the issuing bank.

Invalid Card / Account Number

Your card number is not valid. Please update your card number.

The credit card number is not valid. The customer needs to try a different number.

Expired Card

Your credit card is expired, please update your card.

The payment gateway declined the transaction because the expiration date is expired or does not match.


The “Expired Card” error is tricky - it could mean the card is expired or the expiration date does not match the date on file.

B2C merchants usually receive more generic “Declined” and “Insufficient Funds” responses than B2B merchants, because businesses typically have higher credit limits than consumers.

Keep in mind that decline reasons are not standardized across payment gateways. PayPal tends to return the least amount of information about a decline, while the Recurly gateway (TSYS) and Vantiv (formerly known as Litle & Co.) tend to be the most descriptive.

However, the decline reason tends to originate with the customer’s bank. Some banks simply don’t provide the payment gateway with any further details, which ultimately generates so many “Declined” responses.

How Can Companies Avoid Credit Card Failures?

First, review the makeup of your customers. If you have many international customers, consider requiring fewer address fields. Generally, the more address fields you require, the higher your declines. Consult your payment gateway’s documentation and make sure you’re only sending the address fields that your gateway requires (of course, if you’re collecting taxes, you should make sure you’re collecting the address fields necessary to calculate them).

Second, Recurly merchants can customize the communication their customers receive when a payment fails. Read more about this process, which we call “dunning management,” in a blog post by our Senior Director of Customer Support, Rachel Quick.


How much money does Recurly recover after initial transactions fail?

Decline Message

% of Declined Revenue Recovered

Insufficient Funds

46%

Declined

42%

Temporary Hold

37%

Fraud Stolen Card

27%

Other declines

25%

Invalid Card / Account Number

24%

Expired Card

20%

 

How did Recurly recover these transactions? Either one of Recurly’s automatic retry techniques succeeded, or the customer entered new billing information that was accepted by the payment gateway.

You might be wondering how decline rates differ in various countries - for instance, if you’re a merchant in the United States, should you expect higher decline rates for UK customers? That’s the topic of my next blog post, coming soon.

For more information about how Recurly can save your business money, get in touch with us!

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