What Is Card Issuer Rejection: Meaning, Reasons, and What to Do
Published date: 16.12.2025
Last updated: 16.12.2025
If you’re a business that accepts card payments either in-store or online, you may sometimes come across a “transaction declined” code error message on your card machine. For you, this could mean failed payments, potential lost revenue, and inconvenience for your customers.
But what are the reasons behind this error message, and what can you do about it?
In the following sections, we explain what card issuer rejection means, what some of the most common reasons are, and what you can do to resolve the problem.
TABLE OF CONTENTS
What Is Card Issuer Rejection?
A card issuer decline occurs when a payment transaction is rejected by the cardholder’s bank or financial institution. This decline aims to protect the cardholder and the institution from risks like insufficient funds, fraud, or technical errors.
There are three key players in card transactions:
- The card issuer – the bank or financial institution that issued the credit or debit card;
- The payment processor – the intermediary between the merchant and the card network;
- The cardholder – the customer attempting the transaction.
An issuer decline originates from the card-issuing bank and means that it has refused to authorise the transaction due to several potential reasons. We’ll look into the most popular reasons for a transaction decline in the upcoming sections.
Types of Declines
The transaction declines can be grouped into two core groups – soft declines and hard declines.
A soft decline represents a temporary issue, like a network error or insufficient funds, that can usually be retried. For example, a payment could fail because of usage restrictions, but it may go through when updating the card limits after contacting the bank.
On the other hand, hard declines are permanent issues, like a stolen card or an account closure. In this case, trying the same card won’t work, and it’s necessary to solve the problem before any further attempts. For instance, a hard decline is when a transaction is rejected due to a reported lost card.
Common Reasons for Card Issuer Rejection
Card issuers decline payments for many reasons. Here are some of the most common ones.
Insufficient Funds or Credit Limit Reached
One of the most popular reasons for a card issuer rejection is that a customer using a debit card does not have enough money in their account. In the case where there aren’t enough funds in a customer’s bank account, the rejection is for NSF (non-sufficient funds).
A similar rejection can occur for those using credit cards when the shopper doesn’t have enough available credit to complete the purchase.
The solution for this type of rejection is to ask the customer to add funds to their account before completing the transaction, or to use an alternative payment method.
Incorrect Payment Information
Sometimes, a card issuer rejection simply occurs because the consumer has provided incorrect card details, like the expiry date. This is a very popular challenge for a lot of businesses that rely on online transactions.
As a merchant, make sure that you’ve double-checked the payment information carefully, looking for incorrect details in the card number, CVV, or expiration date.
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Expired or Invalid Card
Debit and credit card declines can also appear as a result of a customer trying to use an expired or invalid card. In this case, the card has passed its expiration date or is no longer active.
One of the ways to solve this type of rejection is to ask the customer to use a valid card or request a new one from their bank.
Suspected Fraud or Security Concerns
Card issuers can also decline a transaction due to concerns regarding fraudulent activity. This usually happens as a result of someone attempting to use a lost or stolen card. At the same time, the card issuer can flag the transaction due to unusual activity or mismatched billing details.
To complete the payment, the customer must verify the transaction with their bank or to request a new card.
Transaction Limits or Restrictions
In most cases, cards have certain limits, like a daily spending threshold, a per-transaction spending limit, or a withdrawal limit. If the customer is unaware or hasn’t monitored their spending, they may attempt to complete a purchase that will be rejected as they’ve exceeded their card limit.
Sometimes, these limits can be adjusted with a quick call to the issuing bank, but in other situations, it might be necessary to use a different payment method to complete the transaction.
AVS Mismatch or Card Code Mismatch
An AVS mismatch can indicate that the transaction was rejected because of the Address Verification Service (AVS), while in the case of Card Code Mismatch, the Card Code Verification (CCV) may mean that the checks didn’t match.
AVS verifies the numeric parts of the billing address entered during the transaction against the address the card issuer has on record. It’s mostly for card-not-present transactions and is not supported by all issuers or countries.
CCV, on the other hand, checks whether the three- or four-digit security code provided matches the code held by the issuing bank.
Merchant or Card Network Issues
As mentioned earlier, something as basic as a card network issue can also cause rejected transactions.
For example, if the merchant’s payment processor or the card network experiences downtime or errors, there’s a likelihood that no payments will be able to be processed and authorised.
If this happens, retry the transaction or contact your payment provider for support.
Invalid Amount
A card issuer may also reject a payment if the amount is entered incorrectly.
Make sure all payment details are accurate and that no invalid symbols appear in the amount. If the issue continues, ask the customer to try a different payment option.
How to Resolve Card Issuer Rejections
Now that we’ve covered all of the common reasons, let’s take a look at how you can manage declined transactions and resolve such problems. Naturally, the resolution will depend on the cause and, most importantly, whether it’s a one-time purchase, a false decline, or a recurring transaction.
For One-Time Payments
If you’re experiencing a card issuer rejection for a one-time payment, inform the customer immediately and ask them to confirm their billing details. If there are any discrepancies, simply ask them to input the right information and retry.
However, if no errors are discovered, the customer will need to contact their bank and request more information on the reason for the decline.
For Subscription Payments
When it comes to subscriptions or recurring payments, the reasons for rejection could be associated with changes made to the user’s card details, or perhaps they’ve changed banks or locations.
Reach out to the customer and ask them to use a different card or contact their bank before retrying the transaction.
For False Declines
For false declines, you may need to examine and enhance your fraud detection parameters to eliminate risks of false positives. It’s advisable to rely on machine learning tools that can identify fraudulent transactions quickly and more efficiently.
Most importantly, take a look at the decline codes you’re receiving to find out what some of the most common issues are and take action.
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Preventing Card Issuer Rejections
The tips we offer above are all about acting on an already existing problem. The good news is that there are also a range of steps you can take to prevent card issuer rejections before they even happen.
For Customers
Where possible, encourage your customers to update their card information regularly and make changes to payment details when necessary. This is incredibly important for all businesses, but especially for those working with recurring transactions.
It’s also key that shoppers monitor their account activity and consistently check balances and spending limits to avoid unexpected declines.
For Merchants
As a merchant, there are also several methods you can implement internally.
For example, enable alternative payment options by offering digital wallets like Apple Pay, Google Pay, or others. You can also use an address verification service (AVS) to validate billing addresses and reduce fraud-related declines.
Last but not least, make sure you’re communicating payment policies and informing customers about your accepted payment methods and limits.
Impact of Card Issuer Rejections on Merchants
Although they can usually be resolved, card issuer declines result in several negative impacts for businesses.
Lost Revenue
Declined payments may sometimes result in abandoned purchases. This means lost revenue and an inability to enjoy a return on your spending on marketing and customer acquisition.
One way to prevent this is to offer alternative payment methods that will allow you to recover sales.
Customer Frustration
Apart from lost financial opportunities, a payment decline can also result in customer frustration, which can directly impact your brand reputation online and offline.
Rejections can lead to negative experiences and reduce loyalty, not to mention customer hesitation to recommend your brand to friends and family.
While sometimes the problem originates from the consumer, it can also be an internal issue. Provide proactive support and clear instructions on steps to resolve the problem and complete the transaction.
Conclusion
Overall, card issuer rejections are common but manageable with the right strategies.
As a merchant, you can reduce the impact of rejections by offering alternative payment options, educating customers, and leveraging advanced payment tools.
We hope that this guide will help you get through these challenges with ease and with zero disruptions to your business.
Frequently Asked Questions
What are card issuer error codes?
Card issuer error codes are short numeric or alphanumeric messages that explain why a transaction was declined. They help merchants understand whether the issue relates to security, insufficient funds, incorrect details, or suspected fraud. At the same time, in some cases, additional information may be required to pinpoint the reason for decline.
How do card issuers determine whether to approve or reject a transaction?
Issuers rely on internal risk systems that assess each transaction in real time. They check factors like spending history, location, merchant type, billing information, and account status. If something looks inconsistent with typical cardholder behaviour, the issuer may block the transaction to protect the customer.
Can a card issuer rejection be reversed?
In most cases, the issuer must re-evaluate the transaction before it can be approved. Customers can contact their bank to verify their identity, confirm the charge, or remove temporary security holds. Once cleared, the transaction may succeed on a second attempt. Keep in mind that hard declines can’t be reversed by a simple re-attempt.
