Digital payments have become one of the most common ways to make and accept payments. However, payments may fail for various reasons and losing legitimate business resulting from it is pretty frustrating. Research revealed that 62% of customers stop buying from an online business after experiencing a transaction failure. Therefore, digital payment failure is a serious issue that an e-commerce business should not neglect. Payment failure on an online payments gateway may result in lost revenue, poor consumer experience, and abandoned sales.
Here, let’s find out how to handle payment failure without losing any money.
Types of Payment Failures
How a business handles a payment failure depends on its type and source. Payment failure from the consumer’s side may happen when the buyer enters incorrect card information or wrong OTP or does not have a sufficient amount in their account. From the merchant’s side, it occurs when there is a security or technology error from the seller’s side.
Whichever party is responsible for the error, there are two types of payment failures. One in which the payment fails, but the consumer’s account gets debited with the amount. Other is the one in which the payment fails and the consumer’s account is also not debited.
Possible Reasons for Payment Failures
Payment failure from the customer’s side can be simply due to poor connection, incorrect details, or insufficient funds. However, things get more complicated when the failure is from the merchant’s side. Some common reasons are:
- Technology Failure: Once the customer enters their payment details, the payment gateway transfers it to a card network. The merchant receives the amount only after proper verification and authentication. Even a minor failure in the technology can cause declined payment.
- Downtime: Digital payment involves several entities, including the acquiring banks, payment gateways, issuer banks, payment processing companies, etc. All these parties have their scheduled or unscheduled downtime. If any entity is in downtime, the server will fail to reach them, and the payment will fail.
- Security Issues: Every entity has fraud detection tools to detect online fraud and mitigate risk. If the system identifies even a minor security threat, it declines the payment rather than taking a chance.
Ways to Handle Digital Payment Failures
Here are a few foolproof ways of handling digital payment failures without losing any money:
Using an online payments gateway that uses multiple payment processors to route transactions
A transaction passes across several parties during the payment process, including the processor. A payment gateway that routes payments to a single processor experiences more downtimes, resulting in more payment failures. That’s why it’s crucial to use an intelligent routing engine that passes transactions through multiple processors. This way, if one processor is down, the system will route the transaction to another processor and increase the chance of approval. Consequently, it helps approve more transactions, completes more payments, and improves customer experience.
Finding a Payment Platform with Latest Functionalities
Digital payments are complete within seconds, but there is a lot of complex work behind the scenes. Therefore, opting for a payment platform with only the basic features may not support business growth. Therefore, a business must find a platform that uses advanced payment technology to handle a high volume of payments without technology failures and system crashes.
Prioritising Payment Security
Apart from protecting customers, advanced payment security systems also save a business from security risks and fraudsters. While building a brand, a business must use a digital payment system that prioritises and follows security regulations. Using SSL and PCI compliant processes, companies can ensure that their business information remains secure and safe. With the right payment processor, they never need to worry about their sensitive data even if a payment fails.
Accepting Multiple Digital Payment Methods
Using an online payments gateway that supports multiple payment methods is best to sell more by reaching more customers. A customer who receives a payment failure message with one way without money debited may try another method to retry the payment.
Altogether avoiding digital payment failures is impossible. However, understanding their reasons and using the tips mentioned here can help businesses work around the issue. Selecting a safe PSP (payment service provider) that supports multiple payment methods and has advanced functions can reduce failed transactions. Even when they occur, it knows how to manage them in the best possible way without losing any money.
So this is all about How To Handle Payment Failure Without Losing Any Money. I hope you may have understood about this and you may never face Payment Failure Without Losing Any Money. If you do so then keep these points remembered. and still, If you have any doubt you may ask us in comment section. Leave a comment below.
This content is posted in Finance Category.
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