How reducing network declines can help you optimize revenue
As almost every aspect of our lives is becoming increasingly digitized, digital ordering and transactions are growing 30% globally every year. This continued shift in consumer behavior makes it an exciting time to invest in technology and digitize as much of your business as possible, including your payment flow.
QikServe Payments (QP) is the comprehensive, reliable, and robust payment platform built for the unique needs of the hospitality industry, allowing your venues to drive sales and grow your business. Using QP to digitize your payments allows you to offer global support for payments across all major card brands and wallets with daily payouts and a consolidated reporting dashboard. The QP platform is built for speed and reliability ensuring your transactions are processed quickly, safely and without interruption.
As ever, this digitization is not without its challenges which sometimes can be largely out of your hands. One of these challenges is failed payments, also known as ‘network declines.’ Put simply, network declines are unsuccessful or failed transactions when the bank declines the transaction request for reasons such as a simple typo in the payment form or suspicion of fraud. Although declines can help you filter out fraudulent transactions, they can also mean losing legitimate customers and long-term revenue. Customers who experience a decline will often abandon their basket and may not return, and will generally create huge headaches for both you and your customers.
Consider some of these industry-wide statistics:
- 58% of declined transactions are legitimate orders
- More than 80% of cardholders who have experienced a false decline said that beyond it being inconvenient, it was embarrassing and aggravating
- 32% of those who have experienced a decline said they’d no longer shop with that merchant
In partnership with Stripe, QP can help you manage network declines so you can utilize your QP payment flow to boost your revenue and increase your customer loyalty.
Understanding Network Declines
Before we get into the specifics, let’s dig into exactly what happens when a network decline occurs, and why they occur. It starts when a customer hits the ‘buy’ button at the end of their customer journey. From there, the payment provider takes the charge details and sends a payment authorization request to the card network, such as Visa or Mastercard. The card network then forwards that request to the customer’s bank.
The payment details managed by QP are simple and frictionless – details such as the card being used, the payment amount and the currency. A much more detailed and encoded message is then sent to the issuing bank who decides whether the transaction should be approved or declined.
Obviously, banks must be incredibly risk-aware and risk-adverse to prevent fraud, and so anything that may be slightly suspicious could lead to them declining a transaction. Reasoning may be because the card has insufficient funds, or has reached its credit limit, the card information has been entered incorrectly or is outdated, or the bank may just be suspicious. Of course, network declines are a necessary evil for fraud prevention and intervention, but they can be hugely problematic for your business. When legitimate payments are flagged, it could hurt your revenue and deteriorate your customer’s experience and their loyalty.
How to Reduce Your Network Declines with QP
Step 1: Collect the right card details
One of the biggest opportunities you have to stop network declines before they occur is by gathering the correct details from the customer at checkout. By collecting the right information from the cardholder through the checkout flow, you can help the bank feel more confident in the transaction and the customer. QikServe Payments offers a fool-proof check out flow which includes the card’s CVC, expiration date, and billing zipcode.
Step 2: Use a specific call to action
Getting your customer to fix an issue – such as a typo – or try a new payment method is an effective way to recover a network decline. If you think a customer is legitimate, you can recover declines by prompting the customer to try again. By utilizing QP reporting, we surface all data pertaining to declined payments with the specified decline reasoning. This will allow you to manage and support your customers if they do experience a decline.
Step 3: Support auto-fill or one-click payment methods
If you want to go a step further in collecting the critical information issuers want to see in a transaction and increase the chances of success, ensure your checkout flow supports one-click payment methods such as Apple Pay and Google Pay. These methods make the transaction efficient and seamless for the customer whilst giving the issuer confidence in that transaction.
The best way to minimize declines is to understand or even reverse engineer issuer decision rules which can be a tough feat for businesses. With Stripe’s vast experience in network declines, paired with QP’s data and expertise, we can support you through smarter fraud detection and reduced network declines. So even if you’re a new business that’s never processed a single transaction, you can leverage all that data to help your own processing. In addition to a huge amount of data, QP and Stripe also have strong and collaborative relationships with all major issuers and card networks – which yield even more insights that help us continue to improve.
As an issuer themselves, Stripe has unique insight into how transactions are handled across partners and can build these insights into fraud prevention and acceptance tools, which significantly reduces declines on legitimate customers with no detectable increase in fraud rates.
Reach Your Business Goals
The rise in digital ordering and payments opens a myriad of new possibilities for ambitious businesses. But making the most of this transition also requires deploying smart strategies. To overcome difficult challenges such as network declines, businesses need the right partners and payment processes in place.
With QP, you can take advantage of sophisticated tools that help you maximize revenue and minimize losses. To find out more about how QikServe can help you accomplish your business goals, talk to us today!