Maintaining a high acceptance rate during transaction processing is crucial for merchants working with a subscription model. Not only does it optimise revenue generation, but it also fosters positive relationships with acquirers and payment schemes. Here’s a closer look at why a high acceptance rate matters and how to achieve it.
Why a High Acceptance Rate Matters
Maximised Revenue
A high acceptance rate ensures that a larger proportion of transactions are successfully processed, leading to increased revenue. By minimising transaction declines, businesses can capture more sales opportunities and maximise their profits.
Enhanced Customer Experience
Customers expect smooth and seamless transaction experiences. A high acceptance rate ensures that customers encounter fewer rejections or declines, leading to improved satisfaction and loyalty. Positive experiences contribute to customer retention and positive word-of-mouth, benefiting the business in the long run.
Maintained Reputation
Consistently high acceptance rates reflect positively on a business's reputation. It signifies reliability, trustworthiness, and efficiency in transaction processing, which are crucial for attracting and retaining customers. A strong reputation enhances the business's competitiveness in the market.
Positive Relationships with Acquirers and Payment Schemes
Acquirers and payment schemes closely monitor merchants' acceptance rates. A consistently high acceptance rate demonstrates a merchant's commitment to compliance and excellence in transaction processing. This fosters positive relationships with acquirers and payment schemes and reduces the risk of penalties.
Reduced Costs and Risks
Low acceptance rates can result in missed revenue opportunities and increased costs due to transaction declines, chargebacks, and potential penalties. By maintaining a high acceptance rate, businesses can mitigate these risks, reduce operational costs, and allocate resources more efficiently.
Hard Decline Reason Codes
Certain decline reason codes indicate that any subsequent transaction rebills on these cards should be promptly ceased. Continuing such rebills will result in unnecessary rejections and contribute to a decline in the acceptance rate. Here are the key hard decline reason codes to be aware of:
- Suspicion of Fraud: The transaction is refused because the card issuer suspects the payment to be fraudulent.
- Card Expired: The customer's card issuer has declined the transaction as the card has expired.
- Lost Card: The card has been reported lost and will not work to complete the transaction.
- Pick Up Card (Stolen Card): The card's rightful owner has reported it as stolen, causing the issuing bank to prevent the transaction from being authorised.
- Card is Blocked: Typically, customer card is added to the internal blacklist, often due to chargebacks or fraud notifications.
Merchants must refrain from reattempting payments for any of the above-listed decline codes. Any subsequent payment attempts will result in further declines, leading to a decrease in acceptance rates. This decline may raise concerns from the acquirer's side and could have a detrimental impact on merchant processing.
Best Practices to Maintain High Acceptance Rates
Merchants should regularly update their databases to exclude expired cards before initiating rebills. This practice helps to avoid unnecessary declines when processing payments. It is important to pre-notify customers in advance of upcoming rebills to reduce the likelihood of declined transactions due to insufficient funds. Maintaining clear and transparent communication with customers regarding billing practices, payment schedules, and how to update payment information reduces the volume of declined transactions. Furthermore, offering easily accessible customer support channels is crucial to assist customers with payment-related inquiries and issues promptly, and can also play an important role in reducing declines.
By adopting these best practices, merchants can enhance their rebilling processes, minimise declined transactions, and maintain a high acceptance rate. For businesses seeking to optimise their revenue, enhance customer satisfaction, maintain a positive reputation, foster strong relationships with stakeholders, and minimise costs and risks associated with transaction processing, a high acceptance rate is paramount. Furthermore, it is a fundamental aspect of successful and sustainable business operations in today's competitive market landscape.
Want to take your business to the next level and increase your acceptance rate on all channels? Get in touch with our experts!
