Card Declined: Problems With Taking Card Payments For Online Sales

Posted on April 25, 2014

Selling goods online, whether through online listings sites such as eBay or via your own website or e-commerce platform, requires constant attention to security with regard to which payments are secure and which are potential scams, especially for those who are relatively new to the whole process.  The abundance of potential scams and opportunities for fraud in the current e-commerce market means that sellers need security measures in place to flag up possibly fraudulent transactions, and this in turn requires an understanding of why certain transactions will be declined.

Why Payments Decline:  E-commerce Security.

Beyond a straight forward lack of funds in the buyer’s bank account, there are numerous reasons why a customer’s payment may be declined, and understanding these is an essential part of conducting online business securely:

You can’t be fully secure in your transactions without payment processing security measures in place, but you also need to be aware that payments will be declined in some instances where the buyer is not necessarily intent on fraud: technical factors can cause security alerts where in fact the customer could have completely honest intentions, but issues arise either when the customer’s card issuer or the seller’s payment processor automatically detect what they perceive to be a problem.  Some card declarations are genuine, others are could cause you to unnecessarily miss out on a sale.

Problems generated with the buyer’s card issuer or bank:

-          Customer may be trying to make the purchase in a different country to that declared in their card details.

-          Customer may have unusual spending patterns associated with their account.  For example, if the customer’s account shows a sudden tendency towards high spending and large transactions which are not reflected in previous usage of the account, i.e. in terms of spending patterns and types of transaction over a long period of time, the bank or card issuer will flag this as a security concern.  This is in the interest of protecting against transactions involving stolen credit cards.

-          Card issuer has a technical or financial issue with the merchant, causing a security alert to be raised.

Issues arising from the merchant’s payment processor; declined payments for online sales:

As a seller operating from an online e-commerce platform, your payment processing software will have certain security limits and parameters that automatically flag up potential issues with a transaction, based on specific criteria pertaining to the likely level of security of the buyer’s payment.  The merchant can adjust these measure in order to be more or less rigid, meaning that either:

All transactions are strenuously checked, meaning the chances of a scam being successful are zero.


Security measures are more relaxed and there is less chance of a payment being declined.  This means the merchant is more at risk of fraudulent transactions, but the risk of having transactions unnecessarily declined is also smaller, meaning less chance of missing out on sales revenue through declined online card transactions.

Some examples of criteria effecting payment

-          Dissimilarity of issuer country and IP country

-          Allowed combinations of issuer country and IP country

-          Dissimilarity of IP country and declared country

-          Absence of IP country or Issuer country

-          Similarity of card/account holder name and shopper email address

-          Similarity of card/account holder name and shopper email address

-          Similarity of shopper email country and IP or issuer country

Each factor is controlled by a points system that flags the transaction as risky when a certain number of points are scored.  The cumulative total of points means the transaction is declined once they reach a certain level.  The merchant determines the security levels as outlined above.


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