Why Do Card Payments Fail, and How Can These Issues Be Resolved?
When card payments fail, the reasons often involve security authentication requirements, banking protocols, or occasional technical issues. Below, we address common payment failures, how to resolve them, and ways to prevent them in the future.
Common Reasons for Card Payment Failures
1. Strong Customer Authentication (SCA) Not Completed
In Europe and the UK, Strong Customer Authentication (SCA) is mandatory for many transactions. If a member does not complete the 3D Secure authentication flow, the payment will fail. During this process:
Members receive an email or on-screen prompt asking them to authenticate and approve the payment.
Without completing this step, the payment cannot proceed, and the invoice will not be sent to the bank.
2. Security Protocols from Card-Issuing Banks
Some banks have additional security protocols that block transactions until the cardholder explicitly approves them. This can lead to payments being declined despite proper setup in the system. To resolve this type of issue:
Members must contact their bank to authorize the transaction.
Once the payment is approved, future charges should process automatically.
3. Technical Errors and Processor Issues
Payment processor glitches, though rare, can cause duplicate charges or failed transactions. For example:
In one incident, customers were charged multiple times within a specific billing window before a corrective process refunded the duplicate charges.
Steps to Fix Failed Payments
When a payment fails due to authentication or other reasons, follow these steps to resolve the issue:
Address Unpaid Invoices: - Forgive the unpaid invoices within the system.
Create New Invoices: - Use the “Create next invoice” option on the member’s plan to generate a new invoice.
Complete Authentication: - Notify the member to complete the authentication prompt via email or on-screen notification when the new invoice is being processed.
Set Correct Billing Schedule: - After successful payment, reset the member’s next bill date to ensure their subsequent invoices follow the correct schedule.
Preventive Measures to Avoid Future Payment Failures
To minimize the likelihood of payment issues, consider the following preventative steps:
Educate Members on SCA Compliance: Make members aware that they may need to complete authentication (via email or pop-up) to approve charges.
Communicate with Banks: Advise members to consult their card-issuing banks for pre-approval steps if recurring payments are likely to trigger bank-level security checks.
Monitor and Address Errors Promptly: Keep track of any notifications or reports of payment processor issues and resolve them with appropriate corrective measures.
FAQs
What is Strong Customer Authentication (SCA)?
SCA is a secure payment process where cardholders must verify their identity through email or pop-up notifications, as required in regions like Europe and the UK.
How can members avoid blocked payments by banks?
Members should contact their card-issuing bank to authorize recurring payments, especially if they’re experiencing security-related blocks.
What happens if duplicate charges occur?
Duplicate charges caused by technical errors are typically refunded automatically after the payment processor resolves the issue.
By understanding the common causes of card payment failures and following these resolution steps, you can ensure seamless payment processing for your members while minimizing disruptions.