Reducing transaction failures: Importance and methods
Transaction failures will often impact both the parties that are involved, but they will always harm the concerned business. As we discuss the importance of and the methods to reduce failed transactions, the stated point should become more obvious.
Why Reducing, If Not Eliminating Transaction Failures is So Important in Terms of Sales
The need to reduce transaction failures is paramount because each time it happens there is a high chance that the company may lose the sale. The customer may not have enough time at that moment to go through every necessary step and sort out the problem. It would also register in their mind as a negative experience because failed transactions are generally accompanied by NSF fees. Consequently, it is also possible that the customer may go to another seller for the same purchase at a later point.
Potential possibilities regarding how it would affect the sale are numerous, but a transaction failure will always be more likely to put off a customer. To improve sales and preserve the reputation of your online sales portal, the rate of transaction declines must be kept to a minimum.
How Failed Transactions Lower the Chance of Customer Retention
Each time a customer is lost because of a failed transaction, they are not just losing the immediate sale, but also all future sales that may have been converted following that sale. Each time the company loses an existing customer on account of one or more failed transactions, they are also losing loyal customers and building a bad reputation. As should be obvious, none of those effects are congruent with customer retention.
How Account Balance Verification Can Prevent Such Issues from Occurring
One of the prime reasons why transactions fail is a lack of sufficient funds or balance in relation to the attempted transaction. Another common instance of failure is observed in the case of recurring transactions where the customer does not have sufficient balance in their registered account for the auto-debit to successfully proceed.
Failed transactions ensuing from similar problems could be avoided if there was a way for the business to verify the customer’s available account balance beforehand. As it happens, there is a way to proceed with account balance verification prior to the transaction.
The Envestnet | Yodlee account balance verification API is connected to more than 17,000 websites that help this nifty tool verify each customer’s account balance in real-time. If a customer is lacking funds in their registered bank/credit account, the system will know and inform both parties of the same. Genuine customers will not be put off as they will be able to avoid NSF and overdraft fees by switching to a more appropriate method of payment.
Account balance verification also acts as a deterrent against fraudulent activities related to recurring payment accounts. Through awareness of the connected account’s balance and history, fraudulent activities can be easily detected and avoided.
As you can see, reducing failed transactions is important for any business and there are tools out there to help you.