Here are 6 common reasons why payments fail and how you can prevent them from occurring

Insufficient funds

If your customer does not have funds available in their account or has reached their account limit before billing: any payment made will fail. This type of failed payment can easily be avoided by notifying your customers before billing and advising them of the pending payment to ensure they have funds available.

Incorrect account details

Payments will fail when payment details are entered incorrectly. This often occurs when collecting payment details manually using paper sign-up forms or over the phone. A simple way to prevent this is to use a proper digital sign-up flow, with checks and balances to ensure payment details are entered correctly the first time.

Expired card

For security reasons, credit and debit cards only have a limited validity period - once expired, any future payments will decline. It’s best practice to remind your customer to update their card details before the next billing cycle.

Some payment facilitators (including Ezypay) utilise card network tokenisation technology, which replaces a credit card number and expiry date with a token that allows businesses to continue billing their customers after a card has expired. This means billing continues, even if a card is misplaced or expires.

Closed bank accounts

Occasionally, a payment may fail due to a customer choosing to close their bank account. 
Currently, in Australia bank direct debit processing technology (the Bulk Electronic Clearing House, aka ‘BECS’) requires three business days to confirm if a bank account has been closed. 

However, PayTo can know in real-time when the bank account has been closed. PayTo’s payment mandates can also be moved from one bank account to another, making it significantly easier for customers to update their payment details after closing their account. 

No authorisation

For security reasons, banks are able to block transactions they may deem as suspicious. Even well-known businesses can be denied if the payment is out of the ordinary for the customer. Informing your customers to contact their bank and advise them of the upcoming payment/s can prevent it from being blocked unexpectedly.

Bank reversal

Like banks, customers can remove authority or even request a chargeback if they see an unfamiliar charge on their account. The easiest way to avoid this is to keep your customers informed of how much they will be charged and how the charge will appear on their bank statements.

How Ezypay can help with failed payments

With over 28 years of subscription payments experience, Ezypay’s payments solution is built to maximise your collection rates by preventing payments from failing. Offering online sign-up forms, pre-debit SMS reminders, VISA and MasterCard tokenisation, PayTo and backed by powerful reporting functionality - our solution will give your business the tools needed to improve your payment collection rates.