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The Flip Side of Authorization Rates
Just as important as understanding your authorization rates is knowing your decline rates. Decline rates represent the percentage of transactions or orders that are not approved.
Like authorization rates, decline rates are measured by both count and volume for transactions and orders.
a) By Count:
Definition: The percentage of individual transactions that are declined.
Calculation: (Number of declined transactions / Total number of transaction attempts) x 100
b) By Volume:
Definition: The percentage of transaction value that is declined.
Calculation: (Total value of declined transactions / Total value of all transaction attempts) x 100
a) By Count:
Definition: The percentage of orders that have at least one failed/declined transaction and no successful authorization transaction.
Calculation: (Number of declined orders / Total number of order attempts) x 100
b) By Volume:
Definition: The percentage of order value that have at least one failed/declined transaction and no successful authorization transaction.
Calculation: (Total value of declined orders / Total value of all order attempts) x 100
📘 An order is considered declined or failed if:
It has at least one failed/declined transaction, AND
It has no successful authorization transaction
It's important to note that a single order may involve multiple payment attempts, potentially across various payment providers, payment methods, card schemes, card types etc
To provide meaningful insights, you can analyze order declines in 2 ways:
Merchants can view details of the last declined transaction for each failed order. This can provide insight into the final reason an order wasn't completed.
We also provide metrics that are averaged out across various factors such as payment providers, payment methods, and card types. This gives a broader view of decline patterns and helps identify systemic issues.
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