What key challenge do online businesses face with card declines?

The key challenge that online businesses face with card declines is reflected in the statement about a 10% lower authorization rate than in-person transactions. Online transactions typically experience higher rates of card declines compared to face-to-face transactions. This is primarily due to factors such as the lack of physical presence for verification, the potential for fraudulent activity, and the complex nature of online payment systems.

When a payment is attempted online, several verification steps are applied, and without the cardholder being physically present, additional scrutiny may lead to more declines. Many consumers are also less likely to engage with or complete transactions if they encounter issues with payment authorization, which can directly impact sales and revenue.

Moreover, the increased chance of false declines, where legitimate transactions are incorrectly categorized as fraudulent, can also contribute to lost sales opportunities. Consequently, understanding and addressing these authorization rate challenges is vital for online businesses in order to optimize their payment processes, minimize declines, and enhance customer experience.