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How to Improve Your Card Authorization Rates

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Last editedMay 20222 min read

No matter the size of your company, credit card authorization rates are important, not least because they have a direct effect on revenue intake. After all, unauthorized transactions lead to fewer sales. In this post, we’ll give you some tips for keeping your credit card authentication rates as high as possible.

Ways to improve your authorization rate

Without further ado, let’s look at some ways you can minimize authorization issues at checkout.

1.  Know your current authorization/decline rate

The first step towards improvement is knowing your starting point. Speak to your payments provider to find out what metrics they use and how you can interpret the rates they provide you with. If your provider doesn’t make this information available to you, you might want to think about switching to one that will.

Some providers track authorization rates while others focus on decline rates. While these essentially provide the same information, they will be analyzed slightly differently. Similarly, if your provider provides you with payment conversion rates, make sure you’re clear on whether that’s the number of visitors to the site which lead to purchases, or the number of customers that initiate purchases but abandon the site before paying.

Once you have all this information, you can set yourself goals for increasing authorization rates.

2. Get to know your customers

Creating a strategy for tackling low authorization rates will require some study of your customers, specifically which demographics have the highest decline rates. That way you can tailor your marketing and advertising towards demographics that are less likely to encounter issues at the payment stage.

For example, those with more precarious financial situations are more likely to have insufficient funds to complete a purchase. So avoiding customers without secure means of income can drastically improve your credit card authorization online rates, especially if you use recurring billing.

3. Collect more data on customers

The more data the processing bank receives about customers, the more information they have on which to base their decision regarding credit card authentication. This can lead to higher authorization rates. However, data and privacy laws such as PSD2 can limit the amount of information you can collect on customers, plus it can be off-putting for users and cause checkout abandonment. It’s therefore key that you strike the right balance between collecting enough data to satisfy the processing bank, while not taking so much that you lose clients.

4. Consider changing your payments provider

Your payment provider may be to blame for your low authorization rates. Investigate whether or not your payment provider is causing you to have more declines than you should, and consider switching if you find they are.

A good payment provider will also help you identify the cause of your low authorization rates and offer you advice on how to improve the situation. If they don’t offer this kind of service, then again, it may be worth switching to one that will.

5. Collect payments directly from customer bank accounts

A good way to bypass the issue of authorization rates altogether, is to look at alternative ways of taking payments.

GoCardless, for example, enables businesses to collect payments directly from their customers' bank accounts.

Collecting directly from the bank account, via direct debit, is less likely to fail than card payments (when cards are lost or expired), which gives the merchant more control — and, naturally, leads to fewer authorization issues.

GoCardless can be used both for recurring payments and one-off payments. Plus, it’s easy to set up, comes with no setup fees and has lower transaction costs than card payments.

Another perk of GoCardless is that it integrates seamlessly with 200+ partners, including major invoicing software like Xero, Chargebee and Salesforce.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.

Over 70,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

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