Technical
Decline
Definition
Decline an authorization request rejected by the issuer or processor. Decline codes indicate the reason: insufficient funds, suspected fraud, expired card, do not honor, etc. Not all declines are permanent - 'soft declines' may succeed on retry. Understanding decline reasons helps optimize approval rates. High decline rates hurt conversion and may trigger acquirer concerns.
Related Terms
Authorization
The process of requesting approval for a card transaction from the issuing bank. The authorization request includes card details, amount, and merchant information. The issuer checks available credit/funds, fraud rules, and account status before responding with an approval or decline. Authorization is the first step - funds are reserved but not transferred until capture.
Retry Logic
Automated rules for retrying failed transactions. Not all declines should be retried - and retry timing matters. Insufficient funds should be retried in a few days; expired card should prompt card update. Intelligent retry can recover 10-30% of soft declines. Important for subscription billing to reduce involuntary churn from temporary payment failures.
Approval Rate
The percentage of authorization requests that are approved. Key metric for payment optimization. Varies by merchant, geography, and card mix - 85%+ is good for low-risk; 75%+ for high-risk. Factors affecting approval: card quality, fraud rules, 3DS implementation, data quality, and issuer relationships. Improving approval rates directly increases revenue.
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