Why card transactions may fail

The immediate thought that runs through your panicked mind is ‘has someone emptied my account?’ Or, far worse, that moment when you come to pay for a dinner date and are told your card has been declined… A mortifying moment.

This does in fact happen more frequently than you would think. What are some of the reasons why your card can decline and what can you do in such situations? According to Guy Raymond El Khoury, Founder of Accomplish Financial, sometimes you can avoid this, whilst at other times it’s entirely unavoidable. “A card programme is designed and implemented with a very fine balance between usability and the card holder’s protection, meaning occasionally some transactions will get rejected.”

Answers

“The most straightforward reason is that you may have insufficient funds in your account or that you have entered the wrong PIN,” explains Guy El Khoury.  “The latter being a frequent problem, particularly when you have multiple cards and may confuse their PINs.”

“It could also mean your card has been damaged, perhaps badly bent out of shape in a pocket or bag, causing physical damage to the contactless antenna. The terminal used for the transaction could also be faulty, which is becoming more common as machines age. On a rare occasion a transaction could be rejected because a terminal has connectivity issues, caused either by a connection issue or a wireless signal problem. This can usually be resolved by trying again.”

Another obvious reason is that you have gone over a security limit, for example your contactless limit. What most people are unaware of is that this limit can vary from region to region or country to country. Also not all payment terminals are configured in the same way and may impose their own limits, which explains why these transactions may fail.

For example, in the UK, the contactless payment limit is £100 and if you go above this you’ll find your contactless transaction will decline. Whereas, in other countries, should you exceed your contactless limit you’ll simply be instructed to enter your PIN or to continue by inserting your card.

What may seem very obvious, but is often the reason your new card won’t work, is because you have not properly activated it. Without properly activating a card, it will fail to work. If you’ve recently reported your card lost or stolen, your issuer would have suspended it, and therefore any transaction attempt will be declined. When a replacement card is sent to you, remember to activate it properly according to your issuer’s instructions.

Different issuers – different rules

“A lot depends on the way different issuers operate their forms of security, but generally if your contactless transaction fails you should always try inserting your card and entering your PIN as a backup,” explains Simon Bradley, Head of Partnerships at Accomplish Financial.

“In very rare cases you may accidentally trigger an anti-fraud system that is in place to protect you. For example, if you make multiple transactions in a row within a couple of minutes for the same amount, the anti-fraud system may think this is a mistake and will temporarily block the transactions or the card.”

He goes on to explain that it could happen particularly when you are travelling: the merchant may not be able to accept certain types of cards, particularly specialist cards rather than more common cards such as debit cards.

The internet challenge

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

Another error could be that the address you give does not match the details for your card. Each small detail can count when it comes to the security of your 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.

He goes on to explain, “More sophisticated merchants will support the latest technology in fraud prevention such as 3D Secure. This is when a window pops up from your issuer asking you to verify yourself. What can happen here is that you have forgotten your 3D Secure credentials or have not followed the onscreen bank verification instructions properly.”

Guy Raymond El Khoury adds, “Very rarely ad blockers and certain pop-up blockers on your browser may also affect the functionality of the 3D Secure process. In the event that this does happen, it doesn’t mean that you have to turn off these ad and pop-up blockers, just whitelist the 3D Secure process so it does not accidentally get blocked by these browser plugins.”

One size does not fit all

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

“Some merchants will also check your card before they bill it when the goods are ready to ship, but this process can vary from merchant to merchant,” explains Simon Bradley. “This validity check may appear to the issuer to be 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.”

What you can do to help

The first thing to do is always to check the basics to check whether you have enough funds in your account and you have entered the correct information such as your PIN. If you are dealing in foreign currency you need to be aware of the extra foreign exchange charge that will affect the final price of the goods or service you are paying for; this could push you over your limit.

Assuming you have enough money and have entered the correct credentials, even trying to use your card as a chip rather than contactless and still find your transaction blocked, the only resort left is to contact your issuer for help.

“A good banking app or website should show you whether an attempted transaction has gone through, or whether it is still pending or even declined,” explains Guy El Khoury. If you are ever in any doubt whatsoever, immediately contact your issuer.

Spend limits

If you know you’re either going on holiday or just on a spending spree a good idea is to notify your issuer in advance that you will be going over your normal spending limits.

Cultural blocking

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

“Once you are armed with this knowledge at least you stand a better chance of not being in the embarrassing situation of your card transaction being declined. And should you have an awkward moment in a shop or restaurant, at least you might be armed with some insight and strategies for how to make the transaction go through when you retry” adds Simon Bradley.

LinkedIn blurb

Almost everyone has had that moment of embarrassment when for some reason their card transaction hasn’t worked. Accomplish tells you some of the reasons why and what you can do if this happens to you.