No one likes seeing a ‘Payment Failed’ message while trying to make a purchase. Even though the entire digital payment process is a few minutes long, it requires entering a lot of information, especially for online transactions. Once all this information is entered, a failed transaction could put the customer off the purchase mindset altogether. Data shows that online merchants have lost 62% of all customers whose transactions failed.
To understand how to optimize your digital payment solution and reduce the number of failed transactions customers encounter, you should know what causes these failures in the first place.
Types of Payment Failures You Should Know About:
Payments fail due to multiple reasons. They don’t have the same root cause; some of the standard payment failure categories are:
- The payment could fail from the customer’s end. This error is generally the result of wrong card details, incorrect OTP (one-time password), or insufficient balance in their account.
- The payment could fail from the merchant’s end. Technology glitches and security errors cause this type of failure. The merchant is responsible for these failures.
- Data transfer errors also cause payments to fail. Sometimes, the customer receives a message saying their payment failed, but the funds get transferred to the merchant eventually.
- Online payment failure means the customer account doesn’t get charged when the payment failure message is sent to them.
Tips to Reduce Instances of Online Payment Failure:
Merchants cannot add extra funds to a customer’s account to complete transactions successfully. But they can take several steps to ensure the avoidable instances of payment failure are minimized or eliminated.
1. Use payment gateways that route transactions to several payment processors:
Through the payment process online, a transaction goes through several parties besides the payment processor. If a payment gateway allows transactions to be routed to just one processor, instances of payment failure and system downtimes increase significantly. Merchants should use a gateway that allows transactions to go through multiple payment processors.
2. Choose a digital payment solution with advanced features and functions:
Payment processing takes only a few seconds. However, multiple complex steps are completed during this time. Choosing a basic payment gateway with only basic features could prevent businesses from scaling up. Businesses need a solution whose functionalities align with their growth ideals and can scale up as business prospers.
3. Prioritise online payment security:
Ensuring payment security standards are implemented not only protects the customer but also protects businesses from security risks and cybersecurity attacks. However, ensuring transaction security while trying to focus on building a brand could be challenging. So choose a payment solution that provides a high level of protection through risk-based authentication and MFA, among other protocols.
4. Accept more payment methods online:
When a customer sees their payment fail using a specific payment method, they are unlikely to retry using the same method. Make sure the payment method you use supports multiple payment methods so that customers have the incentive to try again instead of abandoning their carts. You should also ensure prompt support for customers who face any payment issues so that their brand experience is not permanently distorted.
Several digital payment solution options out there can help you reduce payment failure and increase brand trust. Choose the right option based on your unique requirements.