Each financial institution has its own set of credit card decline codes that it uses to communicate declined transactions to the merchant. While there may be some overlap in the codes used, there is no universal standard for credit card decline codes.
When a transaction is declined, the merchant will typically receive an error code from the bank that issued the card. The error code will help the merchant to understand why the card was declined so that they can take action to resolve the issue.
There are many different reasons why a credit card might be declined, but some of the most common are:
- The cardholder’s bank did not approve the transaction – This could be for a variety of reasons, including insufficient funds, fraudulent activity, or an incorrect PIN.
- The cardholder’s credit limit has been exceeded – This means that the cardholder has reached their credit limit and cannot make any more charges until they have paid down their balance.
- The card has been reported as lost or stolen – If a card is reported as lost or stolen, the cardholder’s bank will cancel the card and issue a new one.
- The card is expired – If a card is expired, the cardholder will need to obtain a new card from their bank.
The cardholder’s name or address does not match what is on file with the bank – This can happen if the cardholder has recently moved or changed their name. If this is the case, the cardholder will need to update their information with their bank.
- The merchant’s account is not set up to process that type of card – For example, if a merchant only accepts Visa but the cardholder tries to pay with Mastercard, the transaction will be declined.
- The merchant’s account is not in good standing – This could be due to a variety of reasons, including late payments, excessive chargebacks, or fraud.
- The transaction amount is greater than the merchant’s allowed limit – Each merchant has a limit on how much they can charge per transaction. If the transaction amount exceeds this limit, it will be declined.
How to Resolve Credit Card Decline Issue?
If you are a merchant and you receive a credit card decline code from a customer’s bank, there are a few steps you can take to try to resolve the issue:
1. Check the error code – The first step is to check the error code that was given to you by the bank. This will give you a good idea of why the transaction was declined.
2. Contact the cardholder’s bank – If you are still not sure why the transaction was declined, you can try contacting the cardholder’s bank directly. They may be able to give you more information about the decline.
3. Update your account information – If the decline is due to an outdated account, you can try updating your information with the bank. This includes your contact information, business address, and credit card processing limit.
4. Try another form of payment – If all else fails, you can try asking the customer to pay with another form of payment, such as cash or check.
What does Credit Card Decline Codes Mean?
When you are a merchant and you receive credit card decline codes, it is important to know what they mean in order to take the necessary steps to resolve the issue. Here is a list of some of the most common credit card decline codes:
- Code 01 – Incorrect PIN
- Code 02 – Card reported lost or stolen
- Code 03 – Card expired
- Code 04 – Cardholder’s name or address does not match what is on file with the bank
- Code 05 – Merchant’s account is not set up to process that type of card
- Code 06 – Merchant’s account is not in good standing
- Code 07 – Transaction amount is greater than the merchant’s allowed limit
If you receive any of these credit card decline codes, you should take the necessary steps to try to resolve the issue. Depending on the code, you may need to update your information with the bank or try another form of payment.As a merchant, it is important to be aware of the different credit card decline codes so that you can take the appropriate action to resolve the issue. By taking the time to understand the codes, you can avoid any future problems and keep your business running smoothly.