How to avoid excessive retries penalties

Tackling excessive transaction retries can help reduce the cost of compliance.

Card networks like Visa and Mastercard have rules for how many times a payment can be retried, and the fees merchants must pay if they exceed these thresholds. Fees can be levied on every non-compliant transaction, and routine non-compliance could lead to significant financial, operational, and reputational risks for enterprises.

Non-compliance with network rules can result in unwanted costs. Following guidance from the networks on excessive retries prevents rule violations, saving money and averting reviews. Below we will explain how you can help your business remain compliant with guidance from Visa and Mastercard.

Understanding Visa's retry rules and fee implications

Visa allows 20 retries in 30 days on soft declines (Cat. 2-4). Visa does not allow retries on hard declines (Cat. 1). Visa charges a per transaction fee for excessive retries.

Source: Visa Rules 7.3.6.3

Visa evaluates reattempts of the initial declined transaction using data including, but not limited to, Acquirer, Acquirer Identifier, Card Acceptor ID (CAID), Token/PAN, and transaction amount.

Note: Visa evaluates reattempts based on presence of the same credential presented: Token to token, PAN to PAN. If a token is tried, declined then a PAN is tried, no fee.

Category 1 - Issuer Will Never Approve

Codes in this category indicate that the card is invalid, never existed, or blocked.

Retry Strategy

Do not attempt to reauthorize these transactions. Cardholders can be advised to contact their bank for further information.

Fee Implication

Fees will be applied on any retries for Cat 1 declines.

• Domestic retries = $0.10
• Cross Border retries = $0.25

Category 2 - Issuer Cannot Approve at this Time

Codes in this category can indicate several reasons that the Issuer cannot authorize the purchase at the time. However, they may authorize it at a later time. Examples might include credit risk, Issuer velocity controls of the consumer, or temporary system outages.

Retry Strategy

Attempts can be made to reauthorize these transactions.

Requirement and Fee Implication

An Excessive Reattempt fee will apply after 20 retries in 30-days:

• Domestic retries = $0.10
• Cross-border retries = $0.25

Category 3 - Issuer Cannot Approve based on Details Provided

Codes in this category indicate that the Issuer cannot approve based on the details provided, such as an incorrect Card Verification Value 2 (CVV2) or expiration date.

Retry Strategy

Attempts can be made to reauthorize these transactions. Before another attempt, based on the response, obtain additional or updated information from your customer.

Requirement and Fee Implication

An Excessive Reattempt fee will apply after 20 retries in 30 days:

• Domestic retries = $0.10
• Cross-border retries = $0.25

Category 4 - Generic Response Codes

All other Response Codes, many of which are technical and limited value/meaning to merchants. Issuers will be subject to enforcement actions when not following rules to use codes in Categories 1-3 and limiting codes in Category 4.

Retry Strategy

Attempts can be made to reauthorize these transactions.

Requirement and Fee Implication (same as Cat 2 & 3)

An Excessive Reattempt fee will apply after 20 retries in 30 days:

• Domestic retries = $0.10
• Cross-border retries = $0.25

Mastercard's Approach to Excessive Retries

Excessive Retries

HARD DECLINES

Card-Not-Present Transaction Declines

3.3 from Mastercard Transaction Processing Rules

If a merchant initiates an authorization request for a Card-not-present Transaction and the Acquirer received any one of the following declined responses in DE 39 (Response Code) of the Issuer’s authorization request response message, the Merchant must not initiate any additional authorization requests for the same Transaction with the same PAN and expiration date at any time.

There are no per transaction fees associated with hard declines but abuse of these declines can result in a GRIP (Global Rules Investigation Program) from Mastercard.

SOFT DECLINES

Mastercard penalizes excessive retries as part of its Transaction Excellence Program (TPE). The TPE program is a series of transaction monitoring initiatives to drive complaint behavior in the ecosystem. Mastercard is introducing a threshold of declined attempts on the same account number, at the same card acceptor, and for the same amount within a specified time period.

• Allow 10 retries in a 24-hour period then charge a fee for subsequent retries.
• Allow 35 retries in a 30-day period then charge a fee for subsequent retries.

Merchant Advice Codes

MACs are meant to provide merchants and acquirers more information when retrying a decline. The goal of MACs are to increase authorization rates while reducing decline rates. There is no opt-out option for MACs as Mastercard sees these as a value add to the ecosystem.

Fee applies when Acquirer submits authorization request that is declined with a MAC value of 03 or 21 where then same transaction was attempted in past 30 days and declined with MAC 03 or 21.

• Ex. Merchant attempts a transaction that was declined by MAC code 03. Merchant then tries transaction again within 30 days and receives another MAC decline of 03. Fee applies.

Authorization Optimizer

Scenario 1:

Applies to CNP recurring transactions with decline reason insufficient funds (51) and MAC equals 24 to 30. The fee is charged when the MAC is received.

Scenario 2:

Applies to CNP transactions with decline reason 79 (Lifecycle), 82 (Policy), or 83 (Security) and MAC 01 or 03. The fee applies when a MAC is received.