Digital Payments in India have started becoming a primary platform for businesses to make and receive payments for the services they provide. With the development of Internet Technology, there is an increase in the scope for digital payments. Customer who makes an online transaction through any mode of payment has an immense amount of trust in digital payment, in this case, payment failures can be frustrating as putting their bank details online is not a joke.
Payment failures can happen because of an error on the user’s side, it can also be called an incomplete payment. Error at the user end can be incorrect card details, incorrect OTP, or insufficient funds in the user’s account.
Consider an example, Son wants to make an online transaction and he chooses the debit card option to make the payment. The debit is registered with his dad’s details and to authenticate the transaction an OTP will be sent to the registered number which belongs to his dad. The OTP needs to be entered within 15 minutes failed to do so the transaction will be timed out and will be considered an incomplete transaction.
The payment processing takes place in the following way:
When a customer makes a payment, there are several steps that are executed while transferring the payment to the merchant. Even a single glitch between these steps can cause payment failure. In the entire payment process where the customer, merchant, and banks are involved, failure at any one end can cause payment failure.
The payment failure can be caused due to:
- Bad Internet Connection: For the transaction to execute successfully a stable internet connection is necessary. If the internet is fluctuating, the payment process is affected, and closing the payment window during the process can cause payment failure or incomplete failure.
- Authentication Failure: Entering the wrong card details causes Authentication failure. Sometimes the OTP is not received on time and the session is timed out, this can cause incomplete payment. Online payment requires the user to enter things manually which is time-consuming at times and also increases the chances of wrong input.
Following errors occur for the transaction failure:
- The transaction cannot be authorized: If the password or OTP is wrong.
- Signature validation failed: When the 3d signature is wrong. A 3d signature is used by the buyer to validate the transaction made by the user.
- Payment not captured: Due to insufficient balance in the account or due to incorrect CVV.
For Example: If you are making a net banking transaction, there are two passwords for the entire process. 1st password if for login into the net banking portal and the other is for authenticating the transaction. If even one password is wrong the transaction is failed. This is similar to the manual error that occurs during UPI payments or card payments. The amount is not deducted from your account and you receive a message that “payment cannot be processed”.
- Technology Failure: Online payment process has several steps for the merchant to receive payment from the customer for his products or services. (issuer bank, acquiring bank, payment gateway). While proceeding with the payment you need to choose the payment mode like Credit/Debit card and fill in the details. Once you finish filling up the details the data is sent to the payment gateway system which then transfers the data to a bank associated with a card. Bank creates requests with payment systems like visa or master card depending on the card used. These payment systems check if the customer has the required amount on balance to pay for the purchase, if yes the bank directly connects with the merchant and the amount is transferred to the merchant’s account within several days. Failure at even one step can cause payment failure.
- Downtime: If there are several transactions happening through the system and the payment gateway is unable to reach the customer’s bank to approve the transaction, the payment fails. Downtime of the issuer, acquiring bank or payment gateway of the merchant can cause payment failure.
- Security: Issuing bank has an aggressive fraud detection technique that blocks transaction that they feel are not normal to customers spending behavior. This is done by analyzing the transaction history of the customer and the transaction is blocked If it doesn’t conform with the customer’s past spending behavior.
There is no worry if the amount is deducted from your account on payment failure. Your amount is going nowhere, it will be refunded to your bank account after the bank analyses exactly which step the payment process failed.
To know Why Do Payment Transactions Fail On An E-Commerce Site? – click here
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