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5 Reasons Your Payment Success Rate Is Low

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedJan 20233 min read

Along with conversions and abandoned checkout rate, payment success rate is a key metric for every business to track. Also known as transaction success rate, it shows how smooth the digital payment experience is for your customers. A low transaction success rate can take a serious toll on revenue and customer satisfaction alike. Keep reading to learn the definition of payment success rate and how to improve the payments process.

What is a payment success rate?

Your online payment success rate measures the percentage of payments that are successfully completed on your website. In other words, if three out of 100 customers are unable to complete the payment process, you would have a 97% payment success rate. Unlike issues such as shopping cart abandonment, this isn’t always something that your business has direct control over. Many times, payment failure is due to broader issues including problems with the payment gateway or insufficient funds in the customer’s account.

Why is payment success rate important?

There are several reasons why transaction or payment success rate is so important for any ecommerce business. Customers expect a smooth digital shopping experience, both on websites and apps. While some customers will retry their payment after it fails, others will simply abandon their purchase entirely. This directly translates to lost revenue and earnings. If your online payment success rate is too high, this indicates that something is going wrong either with your payment gateway or checkout design. You’ll need to find out what the problem is before it impacts your customer experience and brand reputation.

Reasons your online payment success rate is low

So, what causes a low online payment success rate? Causes generally fall into two categories, either issues with the customer’s payment details or issues with the payment ecosystem. Here are five common reasons to be aware of.

1. Your checkout process is overly complicated.

You should start by examining your checkout process. If the page is overly long and complicated, this increases the likelihood that the customer could make an error in entering their details. A smooth, streamlined checkout page reduces these chances. Make sure to ask for payment details first, collecting only the most relevant information.

2. The customer takes too long to complete the transaction.

Another issue with an overly complicated checkout page is that many customers will simply give up. The customer cancels the order due to frustration. On the technical side, a lengthy checkout process can time out in the middle of the transaction before the payment has time to clear. To facilitate faster payments, use stored payment details and enable guest checkout.

3. You’re not accounting for geographical differences.

One reason why card transactions are sometimes declined is due to being issued overseas. Extra security checks might account for failed payments as customers are required to contact their own bank for authorization. Similarly, some payment gateways have higher success rates in specific regions. This makes it tricky for businesses that serve customers all over the world.

4. You don’t offer a variety of payment methods.

When a business only accepts card payments, this means there’s no backup option for the customer to complete the transaction should the first attempt fail. A smooth, flexible checkout process will offer a variety of payment methods, including digital wallets, BNPL services, and others. This gives customers more choice to complete their payment successfully.

5. You don’t use smart routing.

Many of the issues above can be avoided with a smart payment routing system. This uses more than one payment gateway, so that if one option fails the payment is automatically rerouted to another. Sometimes payment gateways experience technical glitches, so using more than one gives you a reliable backup and increases payment success rate accordingly.

How to improve your payment gateway transaction success rate

While credit cards are popular with online shoppers, they do have high failure rates – all of which can lead to customer churn and even bad debt. According to Forrester research, it costs between 11% and 15% of a failed payment’s value to recover it. This is why it’s best to offer a variety of payment methods, including direct debit, alongside credit cards.

GoCardless not only enables direct debit payments, but is also easy to integrate directly into your website with hosted checkout pages to increase conversions. We also offer Success+, a solution designed to automatically retry failed payments for improved payment success rates. By taking these measures you can improve the customer experience and experience higher revenue all at once.

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.