An online payment involves making a payment for a good or services that was bought online and offline over the internet.
When conducting an online transaction, there are many reasons that may lead to an unsuccessful transaction. In India, most often, when an online transaction fails, a pop-up message appears saying –
There is nothing more exhausting than seeing a screen that tells us, ‘Payment failure, please try again? The pain of going through the whole process of online payment (even though it takes only a few minutes) is horrendous. In addition, many customers give up after experiencing this issue more than once and just move on to the next web store.
According to studies, 40% of people do not complete the payment if the failure message appears, and it represents a huge loss to online shops or ecommerce platforms. Think about how bad that is for business?
It’s important not to overlook this issue, online payments are becoming the norm for receiving payments, so don’t ignore it. It can cause cart abandonment and you may lose number of customers.
Despite the fact online payment fails for many reasons, any glitch in each of these entities can result in a transaction failing. Each payment gateway maintains its own security measures, so the data regarding a single transaction passed through a series of hurdles before it reached its destination.
For Example, consider the following as a basic example of a typical flow data in online payment transactions procedure:
You probably don’t know what steps are being taken to ensure payment security. One of these measures is OTPs. They enable authentication and verify that the person initiating the payment owns the card. It may be necessary to add some additional steps to the data flow when you apply coupons or discounts related to cards.
Tokenization is one of the examples that the Reserve Bank of India (RBI) has implemented to ensure secure card transactions as it ensures that the merchant doesn’t have access to actual card details during transaction processing. An entity can store the last four digits of the card number and the name of the card issuer in order to track transactions and reconcile records.
According to the category, payment failures fall into different categories.
The banks, including issuers, are armed with advanced technology that detects and analyses fraud. Virtually every participating party in online payment processing must adhere to security requirements.
Fraud detection tools check whether online transactions are authentic based on previous spending patterns and block or decline transactions if something does not seem right.
Transactions can be declined or blocked for a number of reasons:
2. Failures of online payments are caused by additional factors
There are a few additional reasons to be aware of when it comes to online payment fail, below are a few which we seem regular happen in:
3. The Downtime of the system
There are several factors involved in the online payment process, including payment gateways, payment processors, acquiring banks, and issuing banks. Each of them experiences downtime, no matter how planned it may be.
A failure in the online payment process occurs when any of the key players involved in the transaction experience downtime. When this happens, the transaction cannot be completed and a failure occurs in the online payment process.
It is inevitable that some online payments will fail. However, by choosing a payment service provider (PSP) that is secure and offers advanced features, as well as the ability to accept different payments types, you can reduce the number of failed online payments.
Online payments are routed to different parties during the process, including the payment processors. Payment Gateways that restrict payments to a single processor may cause system downtimes and failed payments.
Several payment processors are used by Easebuzz, so you won’t receive a payment failure notice too soon. By routing your payments to a different processor, you will obtain more approvals and better service to your customers.
The following are the factors which should be taken into consideration before choosing an online payment gateway provider:
Steps to follows
Whenever a payment was previously deemed “failed” by an acquiring bank, the payment gateway periodically polls that bank to see if it has been redeemed as a success. If so, the gateway informs the location where the transaction was done, where they can collect the funds. There are two possible outcomes here
The reasons behind online payment failures are typically related to lack of security compliance. Even though banks and providers are primarily liable, merchants can help create a secure payment environment by following these steps.
A number of PSPs and merchant are expected to be required to comply with strong customer authentications (SCA), and your website must be SSL certified in order to accept payments. Customer’s information is kept safe while it passes between players through SSL certificates.
There is nothing more frustrating to any merchant than experiencing payment failures caused by their service providers. That is why selecting a payment processor that can safely process your payment will also help prevent payment failures. Tip: Less profit is better than no profit at all.
Ensure the payment service provider is PCI DSS level 1 compliant. If the service provider meets these standards, it will guarantee a high level of data security for payments.
It is less common for payments to fail due to technological errors than security issues. Merchants should choose a PSP whose system is technologically reliable. Consider the support quality as well. Payments may eventually fail, so choosing a PSP with quick and responsive customer service is key.