There is nothing more frustrating than when a payment transaction fails. Not only can this result in costly technical fixes for your business, but it can also reduce the trust that a customer has in your organisation. Not to mention the loss in revenue as impatient customers abandon their purchases entirely.

At Acquired.com, we’re payment processing experts so we know a thing or two about error codes. In this guide, we explore:

• Why payment error codes happen
• The most common error codes for both businesses & customers
• How to quickly navigate or fix a payment error when it occurs

If you’d like to speak to a member of our team directly, simply get in touch. Our Support Team is on hand to help you make complicated transaction issues a thing of the past.

So, Why Do Payment Error Codes Happen?

Some payment codes are much more common than others.

The most common payment errors are usually due to an issue with the card or card verification – rather than any technical errors throughout the payment process.

These types of error codes often come about due to:

• Expired cards
• Transactions being cancelled by the cardholder
• Cards being over the credit limit
• Fraudulent or suspected fraudulent transactions
• Incorrectly entered card details, such as the card number, date, or CVV
• Damaged cards (for in-person transactions only)
• Technical issues with payment processors

Payment Error Codes for Businesses and What They Mean

Let’s take a look at some of the most common payment error codes a business might see.

If you don’t find the error code you’re looking for, check out our Issuer Response Codes for the full list.

14 – Invalid card number/no such number

If this response code occurs, it is more than likely that the customer has entered their card details incorrectly.

The card issuing bank will decline the transaction if the card number doesn’t exist or doesn’t match the rest of the card details entered.

What to do: The customer should be advised to double-check and reenter the card details to complete the transaction again. If this still doesn’t work, they should contact their issuing bank for further advice.

41 – Lost Card

Card schemes keep a real-time database of current card numbers. As cards expire or are cancelled, the database is updated and, as soon as a card is out of circulation, it’s flagged in the payment process.

If a card has been reported as lost and has since been cancelled, this will be flagged during the transaction. The transaction should then automatically decline.

What to do: You should inform the customer that the card has been reported as lost. You should not attempt to process the transaction again as you may be dealing with a case of attempted fraud. A genuine customer can again contact the issuing bank for more advice.

43 – Stolen

Stolen cards are also reported to banks and card schemes. Both banks and card schemes will block transactions with a 43 error code. This response code specifically flags the card as stolen, rather than missing or lost.

What to do: For in-person transactions, code 43 means that the business should ideally keep the reported card and not return it to the customer. For card-not-present transactions, this obviously isn’t possible and in this case, you should report the transaction directly to the issuing bank directly.

If a code 43 appears on a recurring or scheduled payment, the card may have been stolen after the last successful payment. If this is the case, you should inform the customer so they can replace the card and provide their new payment details.

51 – Insufficient Funds

Error code 51 appears when a purchase has been declined due to insufficient funds in the account. Either the funds in a customer’s bank account subceed the transaction amount, or if paying by credit card, they have hit their credit limit.

What to do: You should advise your customer to check their bank balance, overdraft limit, or credit limit to ensure there are sufficient funds in the account. Then, try again with the payment card. Alternatively, they can use a different payment card to complete the transaction.

54 – Expired Card

This error appears if the credit or debit card being used for the transaction has expired. This may also appear if the card date has been entered incorrectly.

What to do: Ask the customer to check that their card details have been entered correctly and that their card hasn’t expired. If there are no issues there, they should then try again. Alternatively, you can ask them to use another card.

1A – 3-D Secure Authentication Required

A 1A error code means that additional customer authentication is needed before certain transactions can be completed.

This may entail 3DS Authentication. As outlined by the revised Payment Services Directive (PSD2), more robust security will be required for certain payment services.

What to do: You should advise thee customer to retry the transaction with 3DS authentication.

Payment Error Codes for Customers

On the customer side, it is more likely that they will see one of only a few payment error codes. The most common of which is “Your payment was declined, sorry. Please try again. (Error code: 40000)”.

This can be prompted when a customer has insufficient funds, incorrect payment information, or the transaction has been flagged as fraudulent.

Learn More About Payment Error Codes with Acquired.com

At Acquired.com, we work closely with all of our customers to ensure that your payment processes are seamless and perfectly suited to your existing infrastructure.

This means fewer payment error codes, payment abandonments, failed payments, business errors, and problems for your customers.

To learn more about how we can help your business get the most out of your payment strategy, get in touch with the expert team at Acquired.com.

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In this article, the team at Acquired.com will break down payment processing to help you understand what a payment gateway is, how it works and where it sits in the payments chain.

Get in touch with the Acquired.com team to chat through this in more depth or read on to discover:

• What is a payment gateway?
• How do online payment gateways work?
• What is an acquirer?
• What is a payment processor?
• How much do payment gateways cost?
• How to select the right payment gateway for your business

What Is a Payment Gateway?

A payment gateway is a service used by businesses to collect, encrypt and transmit customer payment data. Commonly termed a “bridge” or “pipe”, a payment gateway sits between the business’s checkout and the business’s acquiring bank (for card processing) or other payment method providers (e.g. e-wallets or BNPL – Buy Now Pay Later).

The key functions of a gateway do vary by provider but as standard, for a card transaction, they:

• Validate the customer’s credit card or debit card details entered at checkout
• Securely pass the payment data to the business’s acquiring bank
• Inform the business whether the payment has been authorised
• Administer reporting and support manual processing of refunds

How Do Online Payment Gateways Work?

Here’s an example of how payment gateway providers work as part of an online card transaction:

1. Encryption at checkout: When a customer makes an online payment, they provide their credit or debit card details at the online checkout. The payment gateway encrypts this sensitive payment data, ensuring its security.
2. Authorisation: The payment gateway sends the encrypted data to the acquirer. Using the acquirer’s payment processing technology, the transaction information is passed through to the relevant card scheme (e.g Mastercard, Visa) and on to the customer’s issuing bank to request authorisation. This request seeks approval for the transaction by checking the customer account is valid and has sufficient funds.
3. Response handling: If the customer’s issuing bank declines the transaction, the merchant can ask the customer to pay via an alternative payment method supported by the payment gateway. If the payment is approved by the customer’s issuing bank, the gateway calls a settlement request (capture) which is passed down the payment chain as before, instructing the issuer to settle the transaction.
4. Settlement of funds: At this point the funds will be visible in the business’s merchant account held by the acquirer. The acquirer receives the funds from the issuer, for said transaction, usually overnight. The merchant will receive the funds for the settled transaction from the acquirer in their business bank account, as per the agreed settlement times between the two parties.

What Is an Acquirer?

An acquirer or acquiring bank is a bank or a non-bank financial institution (NBFI). An acquirer works very closely with a payment gateway and is essential for enabling e-commerce transactions and online payments.

There are multiple different acquirer types, with varied focus and risk appetites, but in essence they all do the same thing. Acquirers provide a connection between payment gateways and card issuers on behalf of merchants through direct connections into the Visa and Mastercard scheme rails. They collect and settle funds a day (T+1) or two (T+2) later. Acquirers charge businesses a transaction fee and take on an element of risk as they confirm approved transactions through to businesses before they receive the funds from the issuer.

What is a Payment Processor?

As explained, the payment gateway facilitates the start and end point of a transaction, encrypting and instigating the transmission of customer payment data at the beginning of the payment chain.

The acquirer processes the transaction data via the schemes and issuing bank to facilitate movement of funds between the customer and the business, a process that involves settlement and reconciliation.

So, what is a payment processor? 

Payment processing technologies are often directly integrated with acquirers. But they are different. Merchant acquirers have the knowledge needed to ensure that all payments going through them are compliant, correct, and don’t show any signs of fraudulent activity. Payment processors simply execute the requests of the merchant acquirers and are not involved in the flow of money – they’re sometimes considered the technical ‘arm’ of the acquirer.

Acquirers may build proprietary platforms or use acquirer processors to facilitate the technical connections to the schemes.

How Much Do Payment Gateways Cost?

Payment gateway solutions can charge businesses in several ways, depending on the gateway offering and how it is integrated to fit your business.

Gateways can offer a suite of additional tools, such as a hosted payment page, integrations into different payment methods and ecommerce platforms, reporting and analytics, 3D secure, account updater, network tokens, risk management and transaction exemption assessment.

You may find payment gateways charge fees for:

• Initial set-up
• Each attempted transaction
• Risk management
• Tokenising card details
• Monthly account management
• PCI-compliance
• Handling refunds and chargebacks
• Reporting and service

How to Select the Right Payment Gateway for your Business

Whether you are selecting a payment gateway for the first time or evaluating your existing infrastructure, it’s important to:

• Understand the initial and ongoing costs charged by the payment gateway provider. Don’t forget to evaluate this alongside the fees from other providers in the payment chain

• Ensure the payment gateway is compatible with your existing platform to avoid any issues during technical integration

• Check how customisable the payment gateway is so that you can continue to provide a great user experience for your customers at checkout

• Confirm that the gateway provider follows strict industry standards set to ensure security throughout

• Don’t hesitate to ask for advice!

As we have covered, payment gateways are a vital part of the payment process but selecting the right payment gateway can be daunting. Making the wrong decision can negatively impact the rest of the technology stack, increase unnecessary costs and damage reputation should you face security or user experience problems.

At Acquired.com, we offer a range of payment and banking solutions, while partnering with multiple acquirers and technology platforms. Our team of payments experts are here to help you make sense of the payment process and find the right solution for your business – everything you need to create a smooth, bespoke payment ecosystem that makes life easier for your customers, and ultimately, reduces your business costs.

To learn more about how we can help your business, get in touch with the expert team at Acquired.com.

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Martin and AJ share examples of how financial services firms are using Open Banking to comply with new regulations and discuss how “Pay By Bank” can influence this part of the Consumer Duty.

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Clare shares her insights on the current landscape of Account to Account payments including:

• A commentary on customers’ current attitudes towards adopting Open Banking payments
• The opportunity for banks and merchants to incentivise the consumer in an effort to continue building trust and credibility around Open Banking payments
• The challenge of defining Open Banking

Listen on Spotify:

Listen to hear more about key topics, including confirmation of payment, banking API performance and overall user adoption. We also deep dive into how Open Banking can support merchants in achieving faster settlement and reducing costs.

Listen to the podcast on Spotify:

Or listen on Apple Podcasts.

Don’t have time to listen to the full podcast? Here’s everything you need to know…

Banking API Performance: There needs to be more conversation around the performance of Open banking APIs – banks often don’t have enough incentive or desire to improve these APIs as they currently don’t generate any revenue for the banks. To achieve long-term ambitions with Open Banking in the UK, it’s important to create an ecosystem in which all the players have the incentive and motivation to create something that’s valuable for customers.

Confirmation of Payment: Consumers demand a seamless experience when engaging with products and services. If we want to improve consumer adoption then we must improve Open Banking to solve the issues consumers face during the checkout process with other payment methods.

One improvement we’re currently seeing is many PISPs are now partnering with payment providers to provide dedicated settlement accounts for Open Banking. Using dedicated settlement accounts provides merchants with notification that their funds have been settled into their account, as well as informing consumers that their payment has been accepted.

Refund Experience: With dedicated settlement accounts, the refund experience for the consumer is much more slick and streamlined. Instead of requesting the consumer’s account number and sort code for a refund, merchants using dedicated settlement accounts will be able to reconcile funds to the Open Banking payment and have visibility of the underlying customer details, allowing them to execute the refund via faster payment easily and quickly.

Open Banking vs Other Payment Methods: We’re already seeing that Open banking provides an accelerated checkout experience in comparison to traditional card payments in terms of less manual data entry. In time, we predict that Open banking will get to a point where it can challenge speedier forms of payment like Apple Pay, Google Pay and other wallets. But it’s vital to recognise that any innovation in the payments landscape takes time and adoption of these new technologies can be slow.

Fraud and Open Banking: Confirmation of payee has been an important development for tackling fraud – last year alone the industry saw close to 200,00 instances of APP (Authorised Push Payment) fraud. However, recent changes surrounding banks’ shared liability for fraudulent payments could have a negative impact on the cost of Open Banking payments, with transactions over a certain value being declined immediately.

Ignoring your customers’ payment preferences can introduce friction into their buying journey and make your competitors a more welcoming alternative. Addressing them, however, can increase conversion, improve customer loyalty, and reduce churn.

Acquired.com recently conducted some research to see which payment methods are preferred when shopping online. We found that 68% of respondents liked using Apple Pay or Google Pay as their preferred payment method, compared with 29% for Debit & Credit Card, and 3% for Open Banking. This result suggests that the majority of consumers want to use familiar, frictionless payment methods.

It’s important to recognise that although digital wallets were highly favoured as a payment method, no single option enjoys complete market dominance or comes close to universal customer preference. To provide the utmost flexibility and ensure your customers have the best payment experience, it’s essential to maintain a variety of payment methods.

The selection of methods for your payments toolkit should be informed by preference data, which can vary based on your business type and the markets you serve. Additionally, take into account trade-offs with other vital payment factors, such as cost and authorisation success rates, when making the choice about which methods to offer.

Why should you provide your customers with a variety of payment options?

Customer expectation and convenience

The global average for shopping cart abandonment in the retail industry is 72.8%. Furthermore, 73% of customers will abandon a poorly designed website in favour of one that makes purchasing a product or service easier. Sluggish checkout processes, which cause shoppers to hesitate and eventually leave, are one of the factors driving this large number.

Consumers today expect businesses to address their needs head-on. By providing a variety of payment options, you will establish yourself as a forward-thinking company that prioritises the needs of its customers. As a result, your business’ visibility will increase, as will your sales. Increasing the number of payment options available will also reduce the amount of hesitation people have when making a purchase.

Growing Your Customer Base

You can make a better-informed decision on which payment options are best suited to your audience by taking the time to get to know your customers based on your products or services, brand mission, buyer personas, and data based on previous purchases or customer engagements.

If you are looking to grow your customer base, it is wise to offer a variety of seamless payment options which cater to different generations and demographics of shoppers. For example, Gen Z and millennials have been found to prefer alternative payment methods such as in-app purchasing, digital wallets, and mobile payments, whereas older generations generally prefer debit or credit cards. Set up a variety of payment options across your main channels and touchpoints to encourage a larger audience of customers to buy from you, and they’ll be more likely to come back.

Building Brand Trust

Consumers value trust in today’s retail environment. You will reach more customers and retain the majority of them if your brand is perceived as transparent and trustworthy. Offering multiple payment options is an effective way to build trust, which is a sustainable growth tool for modern commerce or ecommerce businesses. Having a consistent mix of secure payment options will make your customers feel valued and safe, and your revenue will rise in tandem.

Remain reactive to your customer payment preferences

Once you’ve invested time in understanding your audience, consolidate your knowledge by delving deeper into available payment methods. Armed with this information, you can confidently determine which payment options to integrate into your website or online store, tailored to your audience’s requirements and preferences.

Once your payment methods are operational, it’s essential to monitor your sales sources closely to identify the most effective ones. Any payment methods that see infrequent use and occupy valuable space in your checkout process can be substituted with more streamlined alternatives, there is such a thing as too many payment options!

An all-in-one solution that delivers multiple payment methods

Acquired.com’s Hosted Checkout is a pre-built, highly customisable and quick to deploy solution that allows merchants to accept credit and debit card, Apple Pay, Google Pay and Open Banking payments through a single integration. The solution addresses the financial and operational burdens faced by merchants undertaking multiple integrations in order to offer different payment methods to their customers.

With our Hosted Checkout solution, you can enable and disable payment methods without the need for any coding. For businesses looking to integrate digital wallets including Apple Pay and Google Pay alongside card payments, Hosted Checkout eliminates the need to create a developer account and submit an application to Apple and Google directly, in addition to streamlining the technical aspect of integration.

Additionally, the ability to offer Open Banking payments, a payment method that is yet to see widespread use in many sectors, alongside other payment methods and without the need for a separate integration, can be a game changer for forward-thinking businesses.

At the centre of this revolution are two key players: Account Information Service Providers (AISPs) and Payment Initiation Service Providers (PISPs). In this article, we will explore the two types of third party providers (TPP) in Open Banking, and how their services influence the way users manage their finances and initiate payments. We will also explore how businesses can unlock the benefits of both AISP and PISP Open Banking services to reduce costs and enhance their payments ecosystem.

The growth & benefits of Open Banking

Despite initial slower adoption than other Open Banking services, the use of Open Banking PISP solutions is now growing consistently in the UK. The education surrounding the benefits of Open Banking powered payments has become more widespread, encouraging regular usage by customers, and increased adoption by businesses.

For consumers, benefits such as a more streamlined payment journey with less data entry are clear winners when it comes to checkout customer experience. And for merchants, reduced costs, improved authorisation success rates and real-time payment settlement offered by Open Banking makes this payment method an appealing option to add to ecommerce checkouts.

How do PISP’s differ from AISPs?

In a nutshell, AISPs have ‘read-only’ access to financial data and can view a customer’s bank account data via their financial institution, this allows businesses to gather user information that can influence services offered and help improve their products.

PISPs go one step further, having ‘read-write’ access to customers’ financial information and authorisation to push payments from a user’s bank account, removing the need for any manual data input of debit or credit card information.

How can businesses benefit from AISPs?

The key feature of an AISP is the ability to gather financial data from users and make tailored recommendations to suit specific needs. From a high-level view, this has a very clear benefit – by accessing bank account data directly from users, businesses can gain deep insight into their customers’ finances and money management. Analysing users’ buying habits then allows businesses to make personalised recommendations and offer innovative solutions like spending caps, saving opportunities, and other smart budgeting services.

One example of this can be seen in the lending sector. AISPs allow lending companies to assess customers’ financial information in detail, using the data to quickly analyse eligibility and enhance customer affordability. For the customer, this means they receive decisions quicker and have greater control over their financial decisions. The outcome of this is speedier application approval, reduced administrative costs, and efficient decision making about customer affordability with higher precision.

How can businesses benefit from PISPs?

As with AISPs, PISPs can support businesses in reducing friction and costs, as well as improving the overall payment experience for customers by connecting directly with bank accounts.

For merchants, the benefits of adopting Open Banking payments are substantial. Businesses can expect to save up to 80% on operating costs and processing fees compared to traditional card payments. Open Banking payments also achieve significantly higher payment conversion rates and provide instant settlement, improving cash flow and increasing overall revenue.

Compared with traditional card payments, Open Banking payments save time and effort for the end user. The checkout process involves much fewer steps and customer payment information doesn’t need to be manually entered and repeated, providing a more streamlined payment journey and ultimately improving conversion rates.

Adopting Open Banking

Acquired.com is a registered PISP and can help businesses add Open Banking to their online checkout or create payment links. Pay by Bank (our proprietary Open Banking solution) can be integrated as a stand alone product or as part of our Hosted Checkout solution.

Hosted Checkout can be a fantastic place to get started with open banking, allowing businesses to leverage Pay by Bank as a payment method alongside credit and debit card payments, and digital wallets (including Apple Pay and Google Pay) through a single integration. It’s a great way to easily enable the inclusion of Open Banking payments alongside traditional payment methods, sparing businesses the burden of an additional time-consuming integration process for each payment method.

Interested in hearing more about how Open Banking powered payments can support your business? Get in touch with our team today to chat about Pay by Bank and Hosted Checkout.