A Declined transaction response refers to the declination of a credit card that is being used as a payment method. There are several reasons that a card may be declined and these include there being insufficient funds in the account, the card not being activated, or the card is stolen or canceled. The most common reasons for a card being declined are an incorrect expiration date and incorrect card number. Typically these are the result of user error inputting the numbers.
Each time customer uses a credit card as a method of payment there are several steps that take place before the process is complete. The authorization of the card will give a code that will be unique to a particular sale and all sales, no matter what value will need to be authorized. When a card is declined due to it being stolen or canceled, the issuers will be alerted immediately.
There are also codes used when transactions are declined, and sometimes the merchant will be able to determine the reason for the transaction being declined, if they are familiar with the transaction codes used by the bank. It is not unusual for merchants to see declined transaction rates of up to 10%, although ecommerce sites could see rates twice as high. Decline rates are mostly influenced by the customer’s bank, but you can reduce your decline rate by avoiding repeated attempts to process the same transaction with the same payment method.