Must-Have Features of a Payment Gateway Going into Q2 of the 21st Century
Discover features that are crucial to be competitive and successful in the payments business for 2025 and beyond.
Learn about hard vs. soft card declines. Discover their common causes and proven strategies to recover failed payments.
Ever been on the verge of completing a purchase, only to have your card rejected with no clear explanation? Frustrating, right? For customers, it’s an inconvenience. But for merchants, it’s a potential sale slipping through the cracks.
What many don’t realize is that not all card declines are created equal. Behind those failed payments lie two main culprits: hard declines and soft declines.
Card declines are the uninvited guests of the payment world. But not all declines are the same. Some are non-negotiable. For instance, hard stops are no way forward. However, others are more forgiving, such as soft declines, which might be resolved by trying another payment channel or updating the same payment method details. Simply put, these are called hard declines and soft declines.
For businesses, knowing the difference is key to recapturing lost sales and improving customer experience. Last but not least, it helps companies to keep revenue flowing. Let’s break it down: hard vs. soft declines, what causes them, how they impact your business, and, most importantly, how to prevent them from stealing your hard-earned sales.
A hard decline is the end of the road, as these payment failures happen when a fundamental issue with the card or account can’t be resolved. You can retry as many times as you want, but it won’t go through. The payment in such cases is permanently denied, and there’s nothing much you or the customer can do.
Common reasons for hard declines include:
Soft declines, on the other hand, are more like speed bumps. The payment doesn’t go through, but it isn’t a permanent failure. Often, the issue can be resolved by reattempting the payment or fixing specific problems.
Common reasons for soft declines include:
Unlike hard declines, soft declines leave room for action. Businesses can often recover these payments by reprocessing the payment, asking the customer to verify details, or waiting for a technical issue to be resolved.
As we know, soft declines are temporary blockades that can often be cleared with a bit of effort. However, hard declines are the end of the road with this payment method. Soft decline vs hard decline codes either point to something fixable (a soft decline) or indicate a more permanent issue (a hard decline). Understanding how to handle each type is absolutely necessary to keep the sales process moving smoothly.
Here’s how to reduce or reverse soft declines:
Please pay attention that despite some expert opinions, not all types of soft declines are suitable for payment cascading. For instance, cascading an “Insufficient Funds” decline is not practical despite it being a soft decline. In such cases, allowing the buyer to retry the payment or select another payment method is more effective.
Here are steps you can take to reduce how often hard declines happen:
We hope that by now, you have fully understood what soft decline vs. hard decline means for your business. Here, we summarize it again: Soft declines allow you to recover the sale, but hard declines don’t. The trick is to act quickly when the problem is temporary and work proactively with customers, banks, and payment gateway operators to prevent permanent declines before they happen.
Last but not least, you need to tie up with a payment gateway that makes you win in the payments business with no shenanigans but real dedication toward capturing payments, even the ones lost due to hard or soft declines.
At Spell, we work closely with our partners and consult them on several hidden details. These details help them mitigate financial risks related to soft and hard declines, increasing their probabilities of real success.
Well, for the uninitiated, Spell is a white-label payment gateway solution that provides businesses with payment tools to make revenue generation easier. The tools also help them optimize operating costs and provide customers with an unmatched payment experience.
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