Digital Payments in India has 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 increase in the scope for digital payments. For the customer who make an online transaction through any mode of payment have 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 users side, it can also be called as an incomplete payment. Error at users end can be incorrect card details, incorrect OTP, or insufficient funds in users account.
Consider an example, Son wants to make an online transaction and he chooses 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 on the registered number which belongs to his dad. The OPT needs to be entered within 15minutes failed to do so the transaction will be timed out and will be considered as 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 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.
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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 wrong card details cause Authentication failure. Sometimes the OTP is not received on time and the session 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:
- Transaction cannot be authorized: If the password or OTP is wrong.
- Signature validation failed: When the 3d signature is wrong. 3d signature is used by the buyer to validate the transaction made by the user.
- Payment not captured: Due to insufficient balance in 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 occur during the UPI payments or card payments. The amount is not deducted form 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, acquire 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 payment gateway system which then transfers the data to a bank associated with a card. Bank creates request with payment system like visa or master card depending on the card used. These payment systems check if the customer has required amount on balance to pay for the purchase, if yes the bank directly connects with the merchant and the amount is transferred to merchants account within several days. Failure at even one step can cause can cause payment failure.
- Downtime: If there are several transaction happening through the system and the payment gateway is unable to reach customers bank to approve the transaction, the payment fails. Downtime of the issuer, acquire bank or payment gateway of merchant can cause payment failure.
- Security: Issuing bank have an aggressive fraud detection technique that block the transaction that they feel are not normal to customers spending behavior. This is done by analyzing the transaction history of customer and the transaction is blocked If it doesn’t conform with the customers past spending behavior.
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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 on which step the payment process failed.
Digital Payment Guru provides payment gateway integration service of top payment gateways like PayPal, Paytm, PayU, Instamojo & Atom at best market rates. If you are confused about which payment gateway to choose from, we can help you choose the best payment gateway for your business by analyzing your business requirements.