Credit Card Decline Code

A credit card decline code is a negative response received when seeking authorization for a transaction. It indicates that the payment cannot be processed for a specific reason, such as being declined by the payment gateway, processor, or the customer’s issuing bank.

It’s important to understand that simply swiping a card or submitting a transaction does not guarantee automatic approval. The processor relays the transaction details to the issuing bank, and the bank evaluates the request for authorization. While most transactions receive approval, there are instances where the bank declines transactions that raise concerns or trigger certain red flags.

When a card is declined, the common assumption is that it is due to fraud or insufficient funds. However, the reality is that there are numerous potential reasons for a card transaction to be declined. The issuing bank provides a two-digit credit card decline code as part of their response, explaining why the sale was not authorized.

It’s important to note that a credit card decline code is distinct from a chargeback. While a decline code indicates that a transaction cannot be processed at the moment of authorization, a chargeback occurs after the transaction has been completed. The cardholder disputes the charge with their issuing bank. A chargeback can be initiated for various reasons, including unauthorized transactions, billing errors, or dissatisfaction with the goods or services received.