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Experiencing a do not honour during the checkout process can be a source of friction for both merchants and their customers.
Representing up to 60% of declined payments, do not honours - aka response code 05 - are instances wherein the issuing bank fails to authorize a transaction.
Issues with do not honours stem from a growing overuse with the response code, wherein some cases the response is assigned to a transaction where another code could suffice.
Due to these overlaps, countries such as Spain, Brazil and the USA have a disparaging amount of do not honours compared to other countries.
Whilst the use of this catch-all response code can cause confusion and ultimately devastating cart abandonment for merchants, exploring how to navigate these declines can smooth out any further issues in the checkout flow.
Insufficient funds:
The most common reason for a do not honour is the most simple one. Your customer doesn’t have enough funds in their account.
Whilst insufficient funds actually should respond with their own reason code (depending on the issuing bank and country of origin) this is where the notoriety behind a do not honour’s catch-all reputation originates. Used intermittently by banks, a merchant’s processing statement may display declines as a do not honour or insufficient funds response at random.
Credentials:
Often, transactions fail due to instances of human error wherein the AVS and CVV do not match the other payment credentials entered at the checkout.
For instance, this could fall down to the usage of an expired card or a change in billing address.
The reason why a do not honour occurs in this scenario is that the majority of card issuers do not have a specific response code for credential mismatches. The majority of card issuers do not have a specific response code for this.
Suspected fraud:
Suspected fraud is another instance wherein an issuer might intentionally issue a do not honour response code. Where the correct response code for suspected fraud would be code 59, in many cases it is remapped to a do not honours to avoid pointing fingers at the consumer.
Suspected fraud itself is often a blanket statement for unusual consumer behaviour.
This can refer to scenarios where the consumer is abroad and in a different country to the issuing bank, or is making purchases outside of their typical spending habits.
This includes:
Shopping on a high-risk site
Shopping at unusual hours
Spending large amounts
The frequency at which these occur can depend entirely on the issuing bank’s specific fraud rules.
Ask the customer to use a different card
Ask the customer to contact their bank
Set up automated emails to ask the customer to retry the payment at a later time
Implement fast pay APMs that minimise human error and form fields
Enable tokenisation for quick checkouts
Enable Account-updater to avoid any credential mismatches
Split the payment across two transactions
According to Visa, 76% of all declined transactions worldwide were marked with the response code ‘do not honour’ or ‘insufficient funds’. Implementing the right responses to payment declines can mitigate any further friction in the customer journey.
Contact Total Processing to discover more about streamlining your payments flow today!
