A payment failure occurs when an attempted payment is not successfully authorized, processed, settled or completed. The failure stage and reason determine the correct response.
Why do payments fail?
Reasons include incorrect details, insufficient funds, expired credentials, authentication failure, bank decline, limits, compliance review, network outage or closed accounts.
Hard versus soft failure
A hard failure is unlikely to succeed without changed details or intervention. A soft failure may succeed later, such as insufficient funds or a temporary system issue.
What should happen next?
Capture the provider reason, avoid blind repeated attempts, notify the payer appropriately and route eligible cases to a controlled retry or updated method.
How is failure rate calculated?
Failure rate = failed attempts ÷ total attempts × 100
If 80 of 2,000 attempts fail, the attempt failure rate is 4%. Measure by value and unique payment as well to avoid retry distortion.
What should be monitored?
Track failures by provider, bank, method, reason, amount, retry outcome and customer impact.
