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Why physical card transactions may fail

Why physical card transactions may fail

25 January 2023

There are few people who can say they have never experienced that moment of fear or embarrassment when their card transaction has failed or been rejected with no explanation. The moment when you come to pay for a dinner date and are told your card has been declined – a mortifying moment. Or, far worse, one thought that runs through your panicked mind is ‘has someone emptied my account?’

Card declines do, in fact, happen more frequently than you would think. What are some of the reasons why your card can decline and what can you do in such situations? This article looks at what happens when a physical card transaction (contactless or chip and PIN) fails.

According to Guy Raymond El Khoury, Founder of Accomplish Financial, sometimes you can avoid this, whilst at other times it’s entirely unavoidable. “A card programme is designed and implemented with a very fine balance between usability and the card holder’s protection, meaning occasionally some transactions will get rejected.”


“The most straightforward reason is that you may have insufficient funds in your account or that you have entered the wrong PIN,” explains Guy El Khoury.  “The latter being a frequent problem, particularly when you have multiple cards and may confuse their PINs.”

“It could also mean your card has been damaged, perhaps badly bent out of shape in a pocket or bag, causing physical damage to the contactless antenna. The terminal used for the transaction could also be faulty, which is becoming more common as machines age. On a rare occasion a transaction could be rejected because a terminal has connectivity issues, caused either by a connection issue or a wireless signal problem. This can usually be resolved by trying again.”

Another obvious reason is that you have gone over a security limit, for example your contactless limit. What most people are unaware of is that this limit can vary from region to region or country to country. Also not all payment terminals are configured in the same way and may impose their own limits, which explains why these transactions may fail.

For example, in the UK, the contactless payment limit is £100 and if you go above this you’ll find your contactless transaction will decline. Whereas, in other countries, should you exceed your contactless limit you’ll simply be instructed to enter your PIN or to continue by inserting your card.

What may seem very obvious, but is often the reason your new card won’t work, is because you have not properly activated it. Without properly activating a card, it will fail to work. If you’ve recently reported your card lost or stolen, your issuer would have suspended it, and therefore any transaction attempt will be declined. When a replacement card is sent to you, remember to activate it properly according to your issuer’s instructions.

Different issuers – different rules

“A lot depends on the way different issuers operate their forms of security, but generally if your contactless transaction fails you should always try inserting your card and entering your PIN as a backup,” explains Simon Bradley, Head of Partnerships at Accomplish Financial.

“In very rare cases you may accidentally trigger an anti-fraud system that is in place to protect you. For example, if you make multiple transactions in a row within a couple of minutes for the same amount, the anti-fraud system may think this is a mistake and will temporarily block the transactions or the card.”

He goes on to explain that it could happen particularly when you are travelling: the merchant may not be able to accept certain types of cards, particularly specialist cards rather than more common cards such as debit cards.

What you can do to help

The first thing to do is always to check the basics to check whether you have enough funds in your account and you have entered the correct information such as your PIN. If you are dealing in foreign currency you need to be aware of the extra foreign exchange charge that will affect the final price of the goods or service you are paying for; this could push you over your limit.

Assuming you have enough money and have entered the correct credentials, even trying to use your card as a chip rather than contactless and still find your transaction blocked, the only resort left is to contact your issuer for help.

“A good banking app or website should show you whether an attempted transaction has gone through, or whether it is still pending or even declined,” explains Guy Raymond El Khoury. If you are ever in any doubt whatsoever, immediately contact your issuer.


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