What is a Soft Decline?

Quick Hits:

• Soft declines are declines made by the issuing bank because of user issues, technical issues, or suspected fraudulent behavior.
• Soft declines are not permanent and can be retried, unlike hard declines which are permanent.
• Using 3D Secure to authenticate customer transactions can reduce soft declines created by suspected fraudulent behavior.

False card declines can cost merchants revenue, and often lead to trouble for both merchants and customers. If merchants want to fight credit card declines and capture more payments, it’s important to understand which declines are permanent, and which ones are ok to retry. Thankfully, most credit card declines are soft declines (as opposed to hard declines) and can be successfully retried.

To help you understand how to reduce false declines, and save payments that have been soft declined, we’ll explain what soft declines are and how to reduce them in this blog.

Soft declines are declines made by the by the issuing bank for a variety of issues. Soft declines don’t occur because of invalid card details, but rather user issues, technical issues, or suspected fraudulent behavior. Soft declines are transactions that will often go through if the card is retried again in just a few hours.

Soft declines happen because of typical payment issues or certain security concerns. Examples of Soft Declines include:

Transactions that fail due to user issues

• Insufficient funds
• Card activity limits
• Expired cards

Transactions that fail due to technical issues

• System Failure
• Technical Failure
• Infrastructure Issues
• Processor Issues

Transactions that are flagged for security issues

• Unusual Purchases
• Billing Address and IP Address Mismatched
• Card Making Unscheduled Purchases Abroad
• Lack of Secure Customer Authentication (SCA)

Unlike soft declines, hard declines are permanent rejections that come from an issuing bank or payment processor. Most hard declines occur because of actual or suspected fraud. Hard declines often happen with renewing payments that are connected to stolen, invalid, or closed cards and accounts.

The only way to resolve a payment that has been rejected with a hard decline to ask the customer for another form of payment. This is the biggest distinction between soft and hard declines that merchants need to know.

Soft declines often occur when the card issuer finds a payment that does not adhere to PSD2’s Secure Customer Authentication (SCA) requirements. SCA is a European regulation instituted to secure online payments with multiple layers of authorization. Strong Customer Authentication requires online payments to utilize at least two of the following categories of authentication:

• Something a customer knows (password, PIN, security question, ect.)
• Something the customer has (phone, security badge, ect.)
• Something the customer is (fingerprint, face recognition, ect.)

Card issuers may decline payments that don’t use at least two forms of authentication in the authorization process. Thankfully, merchants can retry payments declined because of SCA, just like other soft declines. The best course of action, of course, is to use tools that meet SCA requirements and eliminate those soft declines in the first place.

If you want to prevent soft declines, use 3D Secure to authenticate customer transactions. 3D Secure will not only prevent many soft declines in the first place, but it can also increase the secuirty of payments overall.

Increasing payment security with 3DS not only reduces soft declines, ishifts chargeback liability to issuing banks, and helps merchants comply with PSD2.

If you’re losing revenue to soft declines, consider integrating a 3DS solution and reclaim the transactions you’ve worked hard to capture. If you’re interested in learning more about 3D Secure, read our new blog on the benefits of 3DS 2.0 or visit our 3DS page.