Payment Management Service provider Verifi announces the general availability of Decline Salvage, a tool that enables the recycling of declined card authorizations for recurring billers. The process helps merchants improve transaction approval rates and overall customer collections. The announcement cites MasterCard data indicating a 25-30% decline rate on recurring transactions compared with a five% decline rate for card-present sales.
“Recurring merchants who accept credit card transactions have experienced the lost revenue and frustrations associated with declines when attempting to collect for the goods or services they deliver to consumers,” said Jeff Sawitke, Senior Vice President and Chief Product Officer for Verifi. “These losses can be costly, and merchants offering subscription programs are especially vulnerable as their business models are dependent on receiving timely, recurring payments. We are offering our Decline Salvage solution as a standalone service so merchants in need of assistance in this area can easily integrate our solution into their existing decline recycling process.”
Declines result when a card issuer denies an attempted transaction on a card and decline salvage typically occurs on transactions where a merchant has already attempted payment authorization several times and failed. Merchants with recurring billing or installment payment structures are particularly sensitive to declines, as their business models are dependent upon receiving the recurring payments for goods or services provided to the consumer beyond the initial or trial billing period. Merchants can attempt to recover funds from a declined transaction, however the manual review of account information is costly.
Decline Salvage as a standalone service is not necessarily meant to replace a merchant’s existing decline recycling procedure. Rather, it offers the merchant an additional tool to assist them in retaining revenue from their existing clients. Verifi’s proprietary solution effectively helps merchants maximize the approval rate on previously declined transactions and typically results in a 4 to 10 percent average recovery. Because the future levels of continuity billing are equally successful, Verifi’s Decline Salvage solution also increases consumer lifetime value.
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