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I've been noticing an unusual deviation between non credit card (paypal,gcheckout) and direct credit card orders on our website.
Upon further investigation , It seems like credit card transactions that are declined by our processor have increased dramatically this season , talking about:
Visa declined 14% last season, this season 24%
MC declined 9% last season, this season 16%
Amex declined 4% last season, this season 29%!
This also happening on declined overall processing volume, therefore reducing the likely hood that there are just a greater number of fraudulent/bad txns.
I contacted the processor and their reply was it's a bank or card issuer problem , with heavy clamping down on fraud going on this season (Wouldn't that affect paypal also?) . Since i can't contact the banks or issuers, i would love to get your feedback.
I've checked out website , everything seems to be in order.
Have you noticed any thing similar to this? Higher % of declined CC txns? Any insight or suggestions?
You haven't restricted your approval parameters, have you? AVS, CVV, etc.
Thank you for taking the time to reply.
No change in security limitations, actually earlier this year we've done some work to reduce number of checkout pages, less information required, etc.. which had an Amazing effect that lasted up until early October when all this started.
Funny thing is overall credit card volume is down , while paypal and gcheckout are just inline with where they're suppose to be in terms of volume. So people are not opting for Paypal/Gcheckout instead of credit cards, and credit cards are going through fine on paypal and gcheckout, so that limits the over extended argument.
This baffles me ....
I am not sure if you can see the card numbers or not on a declined order but you could see if they were return customers maybe call a random number to see how many are real how many are fraud.
Kinda check up on them to see if they made an error putting the information on the site kinda thing.
If you do let us know on the results.
I do know for a fact Amex has been a card being used more and more on fraud orders. There for some time we were getting hammered by them using Amex for small amounts I am talking 50 bucks so we got burned on a number of them and started checking all orders no matter the amount.
Another thing we've run into less often is when the customer contacts the issuing bank they are told the transaction was declined because the bank saw a discrepancy (out of area or unusual amount). I guess what's supposed to happen is for the customer to contact the bank and ok the transaction then put it through again. Unfortunately, it seems as likely for the customer to just go purchase elsewhere.
How do I know? Because I'm a customer myself who uses a credit card and they happen to me for no reason!
However some declines (increasingly frequent) make just no sense. I've been seeing declines that have matching CVD and AVS info AND are Verified by Visa authenticated on mere~25$ amounts of for returning customers.
We process quite a large volume per month and dont have any processing limits with our processors.
I've always been wondering why don't credit card companies just implement PIN authentication instead of signatures, like for example bank debit cards?
Wouldn't that just save millions and greatly reduce the need for anti fraud call centers,mathematical formulas and FDBM (Fraud detecting black magic)? I know fraud will always be there, but i guarantee it will be greatly reduced by the above.
Furthermore , Pen signatures are so yesterday and i cant count how many times i've scribbled nonsense on that signature line with no one checking anything. Come to think of it, all my credit cards have the signature on the bank almost wiped off from constant insertion and removal into my wallet.
One can argue there's the "impulse purchase" aspect of credit cards and adding the extra step of authentication would give more thinking time to impulse purchases , which is always a disaster, but really , when was the last time you changed your mind between swiping your bank card and punching in the pin?
I really dont want to ask my customers for their name , address , phone number , blood type and how many beers they had last night when all they're buying is yellow rubber ducky for the bathtub , but credit card companies leave us no choice and most customers choose not too unfortunately.
Simple to implement mandatory PIN authentication on all CC transactions removes the need for all this and means lower fraud handling costs for both banks and merchants, which translates most definitely into savings passed onto the customer, not to mention peace of mind.
I'm sure someone up there must've thought about this and the reason this is not implemented eludes me..