Improving Authorization Rates with a Single PSP
Blog post from Basis Theory
Payment authorization is the process by which a consumer’s financial institution confirms that a transaction is legitimate, funded, and permitted before the merchant captures the funds, making authorization rates a central measure of payments performance. Rates between 85% and 95% are generally desirable, while unusually low or sudden declines may indicate operational problems, fraud, chargeback pressure, or overly restrictive security controls. Merchants using a single payment service provider can improve results by validating and correctly transmitting cardholder data, adopting network tokens to reduce expiration-related declines and fraud exposure, and designing systems that detect network outages and queue valid transactions for later processing. Subscription businesses can also improve collections through decline-code tracking, dunning and retry programs, and billing schedules that avoid periods when customers may have low balances. Hard declines typically should not be retried, whereas soft declines such as insufficient funds or temporary system failures may succeed later. Although these practices can strengthen performance with one provider, using multiple PSPs can further optimize approvals by routing transactions to providers better suited to particular regions, currencies, or risk categories.
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