A payment is classified as failed when the transaction is declined by the customer's credit card issuer or bank. Payments can fail for a variety of reasons. Listed below are the 7 most common causes for failed payments.
1. Insufficient Funds
When a customer does not have enough money in their bank account to complete the transaction, the payment fails. It can be resolved by the customer entering more funds into their bank account. The failed payment amount can be collected by re-billing that customer again.
2. Incorrect Account Details
This usually happens when incorrect banking details are entered into the system in error by a customer or staff member, resulting in the transaction being rejected by the bank. To resolve this, the banking details need to be updated. The customer is then re-billed to recover the failed payment amount.
3. Closure of Account
When a customer closes their bank account, the transaction is rejected by the bank. This can be resolved by updating the current banking details into the Ezypay billing system. The failed payment amount can be recovered through re-billing.
4. Expired Credit Card
A credit card transaction is usually declined if the card has expired, but Ezypay offers certain exemptions from this – meaning that we can continue to perform successful transactions in specific regions, even on expired credit cards.
5. Authority Not Held
All bank and credit card holders can place a stop order on future debit processing. To restart a recurring payment cycle, the customer will need to authorize the bank to allow all Ezypay transactions. The failed payment amount can be collected by re-billing the customer.
6. Bank Reversal
The customer, or the bank itself, can perform a bank reversal if it suspects that the transaction is unauthorized. In this case, the customer’s bank is contacted to clarify the reason for the reversal. Once satisfied, the customer is re-billed for the collection of the failed payment amount.
There can be multiple other reasons why a payment can fail including, but not limited to bank system errors. In such scenarios, it would be best if the customer contact their card issuer to resolve this issue before retrying.
While it’s almost impossible to completely avoid payment failures, understanding why they happen can help you work around the issues that may cause them. Many times, the causes of failed transactions are avoidable. And, when payment failures do occur, you’ll know the best way to manage them.