Across the Board

Blog on e-business and online payments.

Why the same transaction may be successfully processed by one payment provider, but not by a different one?

Yeah, that’s possible. And in fact not so rare. The same card, similar transaction. We are able to pay for one product (on website #1), but we aren’t for another one (on website #2).

The reason is simple: one merchant (website #1) has a merchant account with one payment service provider (PSP #1); the other one (website #2) with another one (PSP #2). And one payment service provider/merchant account does not equal another one.

Let’s say we have two SaaS businesses (two merchants). Both are from the UK. Both have the same customer, who wants to pay for both of these services with the same card. Let’s say the customer is from Brazil.

The customer types the credit card details into the payment form on website #1. He submits the form and everything is fine. Transaction is successful. He buys what he wanted to buy.

Then the same customer types the credit card details into the payment form on website #2. He submits the form and… transaction is rejected. He tries again, with the same result – unsuccessful transaction.

What’s the reason behind such a situation?

There are 3 possible reasons.

  1. PSP #2 rejects the transaction. This PSP could have their own anti-fraud tool implemented in such a way that it rejects the transaction. Or transaction limits, or some risk limits. Or the customer could be on a blacklist (his credit card, IP, email address, physical address, country etc).
  2. Acquirer behind PSP #2 rejects the transaction. Like above. That could be an anti-fraud tool or some limits. Or the merchant account is configured improperly.
  3. Customer’s bank rejects the transaction. That could be anything. Limits on customer’s credit card or a bank account (e.g. daily transaction limits); not enough money on the bank account; bank policies (e.g. PSP#1/acquirer behind PSP#1 may send these transactions as eCom transactions and PSP#2/acquirer behind PSP#2 may send them as MOTO); or their own anti-fraud/risk tools (e.g. if the customer is from Brazil, merchant is from the UK, acquirer is from Poland – bank could reject such a transaction, especially if this customer has never ever paid for anything abroad).

How to check what’s the reason?

If you’re a merchant – simply log in to your merchant panel and check if there is some kind of sale error, which represents this unsuccessful transaction. And look at the description of this rejection. If it’s something like “Rejected by credit card company” or “Card declined” – it’s the bank rejection. If PSP or acquirer rejected the transaction – you will find some more detailed description.

If you’re a customer – simply contact the merchant, so they can check in their merchant panel what the reason is.

How to solve/prevent from such situations?

I would say that the best way to prevent such situations from happening is to create a couple of merchant accounts.

You can use one payment service provider to process all transactions, but this PSP needs to have the ability to create a few merchant accounts for you (in a few acquiring banks). And then, if you have a couple of merchant accounts – you need to use them to process transactions. So you can use an automatic tool such as Automatic Payment Optimiser or simply choose on your own which merchant account you would like to use to process a given transaction.

mm

PayLane's CEO with all kind of skills - programming, marketing, team leading and more. A movie lover and snowboard fan. @KarolZielinski

Are you a business looking for a payment processor?



Comments:

  • Thank you for writing about this important topic. I have clients all over the world. Some entire countries are banned by particular merchant processors. B2B and ecommerce sellers need to NOT assume the customer’s credit card is invalid. I once had a client I referred to a B2B platform who had 3 different credit cards from 3 different banks on two different continents declined for a $30/mo transaction. Even though I personally recommended the client to the owner and told him they paid me far more than that from the same card, the B2B owner was incredibly rude to my client and thought he was “a deadbeat” for not having $30. When the customer had someone in the U.S. use the same credit card the transaction went through – proving that the issue was his IP being in a blocked country.

Don't miss any articles!

Leave your email and get regular updates!

Close window