False Declines: Here’s the True Story

False Declines: Here’s the True Story

False decline impact projection graph

It’s estimated that false declines will grow to $443 billion by the end of 2021 (Figure 20). Plain and simple, that’s a lot of lost revenue. ¹

But really – what is a false decline. It’s an insult to be honest. It’s the worst kind of friction there is. It’s a good transaction (meaning would-have-been sale) that’s declined due to suspicion of fraud. It’s missing out on a good sale because of a mistaken decline and it eats into profits. But that’s not the biggest problem. (although admittedly a big one.)
Think about a false decline from the buyer’s point of view. The very first little league game is around the corner - bat, glove, new tennis shoes – even a new water bottle, can’t forget that - everything is in the cart. They hit the buy button – and BAM. No sale.

So, their first thought is? What happened? I have enough money, it’s me, what did I do wrong? Little did they know they were just false declined. The average authorization rate for online purchases in the sporting goods vertical is only 87% compared to card present. And the average fraud rate for the sporting goods industry is 112 bps. ² They got caught up in the world of false declines and fraud just trying to make an online purchase, and a good one at that.

So now what happens? Most likely, one of two things – or both –happen. They choose a different credit card and try again. Or they are so irritated that they start the search all over again and eventually buy from another merchant. So, in the end, the merchant, the issuer, or both lose. Not to mention that once a consumer switches to another card or goes to another merchant, the chances of them returning to either is probably pretty slim. And let’s hope they don’t share that bad experience on social media.

But for the merchant and issuer, it’s not easy either. Because becoming security experts and tracking down false declines is not what their focus should be. But there’s an answer (and luckily, we have it). It all starts with authentication. And EMV® 3-D Secure. That little league purchase would have had a 4.5% better chance of happening and increasing authorization by authenticating the transaction first. That’s the authorization lift in the sporting goods industry for EMV 3DS vs. non-EMV 3DS transactions. ²

Using EMV 3DS can result in fast and secure authentication with fewer declined transactions, increased approvals, and a better shopper experience.

EMV 3-D Secure is the latest set of protocols that can authenticate CNP transactions on any device, with limited checkout friction while helping to reduce false declines. More than 130 data elements are shared with the issuer that help authenticate the identity of the cardholder, so issuers can authorize with greater confidence, and that’s the key. Because of all this data, using EMV 3DS can result in fast and secure authentication with fewer declined transactions, increased approvals, and a better shopper experience.


With card-not-present fraud losses projected to total $7.9 billion in 2021, up from an estimated $7.2 billion in 2020, ᶾ it’s time to put a solution in place to help combat both fraud and false declines. Choose Cardinal - a partner that offers insight into both sides of the transaction - and has been doing authentication since authentication has been around. We’ll do the heavy lifting, so you don’t have to. And as a network agnostic provider, Cardinal’s suite of smart solutions helps increase approvals while decreasing fraud and reducing false declines - all to improve the customer journey. Just the way it should be.

If you have questions, let’s talk. We are always here to help.

¹ Aite Group’s study, “The E-Commerce Conundrum: Balancing False Declines and Fraud Prevention,” July 2019
² This data represents only Visa transactions and includes settlement files and disputed issuer fraud that was reported into Visa Net. The data in this report was aggregated from a sample of merchants in the sporting goods industry who use 3-D Secure and, therefore, can be used to provide industry benchmark. Statistics are drawn from the latest available data covering the period Oct 2017 to Sep 2018
ᶾ From “Having Exhausted Covid Scams, Criminals Are Returning to E-Commerce Fraud And Malware Attacks,” Digital Transactions.net, February 21, 2021

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