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Optimizing Credit Card Processing/Combating Credit Card Declines

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Our company has experienced rapid growth in the last 2 months in our credit card transactions - more than 5x typical monthly transaction volume.  Unfortunately, we are now seeing a large number of declined transactions, with the majority of the reason codes being the less than helpful 'Declined'/'Reason Code 12' coming back from the gateway/issuing bank. 

We are currently working to see what we can do to a) successfully retry accounts and b) determine the most effective mix of data to send through the gateway (number & exp. + CVV/CID + Address verification, etc.). 

Thoughts that would be great to see from the community:

  • What are failure rates are typical for online payments? Heard the usual range is in the 5-7% range for online transactions
  • Any consultants/payments experts we can engage to optimize our payments platform?

About the company

  • Multi-national customer base (50% US/50% International)
  • Zuora with PayPal/Payflow gateway (Visa/MC/AMEX/Discover/PayPal/eCheck)
  • Annual and recurring billing options


Sara Voight
Title: Controller
Company: Critical Signal Technologies, Inc
(Controller, Critical Signal Technologies, Inc) |

Our company processes our smaller clients (less than $4000 per year)on an auto-pay by credit card platform. We are moving towards an auto-pay by ACH since it will be significantly less expensive. We go through the normal paperwork to set up the account and obtain all card info (name, address, cvv, signature, etc). With the data protections in place for this information at PayPal or any other merchant processor, we are often in doubt as to why someone's card has declined. I have never used a consulting firm to assist with these types of collections, because I think there are ways to manage more efficiently in house.

Our decline percentage ranges up to 8%. Since most of these clients represent our mom and pop smaller volume sales, I don't think this is unusual. To keep our declines lower we have instituted some practices which go a long way towards educating our clients and having them help us when there is a change.

A) We keep a spreadsheet (data encrypted) with the expiration dates and reach out in advance to get updated info before we get to the decline step. "Dear client, it looks like you'll be getting a new card soon. Please fill out the attached form and return to us so you won't have any system issues."

B) When someone's card declines we automatically suspend their account and send them a note with a new authorization form to update their info. This step is key because it raises the level of participation greatly when someone can't order more until they have taken care of their account.

C) Our repeat offenders - clients who have more than the usual turnover, several fraud card changes in a year, or some other recurring reason they have to get you new information, delay payment for services, and continue to order in the meantime - will be our newest ACH clients and/or deposit in advance clients.

Our goal is to decrease the number of declines through educating our clients that we are important enough to remember when a card changes. Since they are lower volume revenue to us we also have to touch them less and it helps us on our margin. Most of our clients understand/appreciate when we let them know that we are not given a reason for the decline. It saves them the embarrassment of thinking we do not know when they don't have enough credit in the account when this issue comes up.

If you let your clients input their CC info into the system directly, then at least make sure you can get a listing of expiration dates so you can prompt them to update their info at the right time.

Topic Expert
Anand Goel
Title: CEO
Company: Optimized Payments Consulting
(CEO, Optimized Payments Consulting) |


Two things you can try...

Ask customer to make sure they entered card number correctly. If this is a recurring transaction where the card number processed successfully in the past, it might be that the card number has changed. It is not uncommon for card numbers to change either because the consumer lost his card or upgrades to a different card. Ask customer to update card information on account. If this does not resolve the problem, ask the customer to call the credit card issuer to resolve.

Secondly, check the BINs of cards that are declined. A BIN (Bank Identification Number) is the first 6-digits of a card and designates the bank that issued the card. Check to see if there is a pattern with declined transactions tied to certain banks. You can use the following lookup website to translate a BIN to the name of the issuing bank -

Anand Goel

Ryan McDonough
Title: Co-Founder & Former CFO
Company: Accompany
(Co-Founder & Former CFO, Accompany) |

Anand - Appreciate the link to BINBase. We've been investigating potential issuing bank patterns. This is a good resource to quickly find a new issuing bank outside our usual suspects.

Ryan McDonough
Title: Co-Founder & Former CFO
Company: Accompany
(Co-Founder & Former CFO, Accompany) |

Sara - Appreciate hearing your experience.

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