27 January 2023

In our previous article, Why physical card transactions may fail, we looked at reasons why contactless or chip and PIN transactions may fail. This article examines the reasons why card transactions over the internet or phone might fail.

The internet challenge

“When you use your card to make purchases online or over the phone, there are a whole different set of challenges,” says Guy Raymond El Khoury, Founder of Accomplish Financial. “The most common is entering the wrong security code or CVV. The merchant will check the card number is valid but if you enter the wrong CVV or expiry date your card will be rejected.”

Another error could be that the address you give does not match the details for your card. Each small detail can count when it comes to the security of your card and the chances of a transaction being approved or declined.

There is also the matter of the merchant’s technology or services provider not being up to date, in which case, they may reject certain card types as they do not know how to handle them or know how to evaluate the risk. With the issuer having a higher standard of fraud protection than the merchant, this makes it difficult for the merchant to process the transaction. Merchants do not want to be liable for fraud so even though they may be required to accept all transactions, they occasionally refuse to do so.

3D Secure

“There are also cases where the merchant misconfigures a card transaction message when sending it to the issuer, which makes it difficult for the issuer to tell whether these are genuine transactions initiated by the cardholder. This can lead to the transaction being rejected,” says Simon Bradley, Head of Partnerships at Accomplish Financial.

He goes on to explain, “More sophisticated merchants will support the latest technology in fraud prevention such as 3D Secure. This is when a window pops up from your issuer asking you to verify yourself. What can happen here is that you have forgotten your 3D Secure credentials or have not followed the onscreen bank verification instructions properly.”

Guy Raymond El Khoury adds, “Very rarely ad blockers and certain pop-up blockers on your browser may also affect the functionality of the 3D Secure process. In the event that this does happen, it doesn’t mean that you have to turn off these ad and pop-up blockers, just whitelist the 3D Secure process so it does not accidentally get blocked by these browser plugins.”

One size does not fit all

Merchants also run anti-fraud systems of their own and you may accidentally trip this system for a variety of reasons. If for instance you are trying to purchase something on the internet and the merchant can see that your country does not necessarily match your shipping address or the address of your account.

“Some merchants will also check your card before they bill it when the goods are ready to ship, but this process can vary from merchant to merchant,” explains Simon Bradley. “This validity check may appear to the issuer to be an attempt at an unconventional transaction or fraud attempt and may be accidentally blocked if the issuer has not seen this attempt before. For instance, some merchants will simply check a card’s validity with a transaction for 0.00, where others may check for amounts between 0 and 1, which may appear suspicious to the issuer.”

Spend limits

If you know you’re either going on holiday or just on a spending spree a good idea is to notify your issuer in advance that you will be going over your normal spending limits.

Cultural blocking

This falls under the category of forbidden merchant, where, for legal or ethical reasons, certain types of purchases are forbidden. Commonly blocked categories here, for instance, could be gambling or alcohol related. Once again, your issuer would be able to advise you here.

“Once you are armed with this knowledge at least you stand a better chance of not being in the embarrassing situation of your card transaction being declined. And should you have an awkward moment in a shop or restaurant, at least you might be armed with some insight and strategies for how to make the transaction go through when you retry” adds Simon Bradley.