Mar 1, 2024
5 minutes

Six reasons why your corporate debit card gets declined – and what to do

Mastering Cost Control in Challenging Times: Strategies for CFOs
Quick summary

Debit card declines happen for lots of different reasons. From technical errors and daily purchase limits to expired cards or suspicious activity, debit card payments can get blocked and cause annoying (and impactful) delays in your business activities. Find out what causes card declines and how to fix (and avoid) them.

Table of Contents

    Finance leaders, picture yourself as Martin, your new marketing assistant, for a second. He's out in a brick-and-mortar store, buying equipment for an event. Card declined.

    We've all been there, and it can be stressful and embarrassing, particularly if you're standing in front of a queue of shoppers. Worse still, if you're purchasing for work and a merchant rejects your payment, you risk causing inadvertent project delays.

    Back in your shoes for a second, and as a finance leader, you want to keep your company's cogs turning and help Martin and his colleagues get their jobs done (including making work-related purchases). So, understanding how to overcome hurdles like debit card declines is a biggy.


    Are you really getting the most from your corporate card program?

    What is a debit card decline?

    You know this already, but for the sake of a universal definition, here goes:

    A debit card decline is when the merchant processing your transaction can’t complete the payment. Typically, they’ll see a message on the card terminal (if you’re paying in a store or the online checkout if you’re purchasing online) that says ‘card declined’ or ‘payment failed’.

    Payment failures are often due to insufficient funds but can also be due to merchant error, browser time-out, or other issues with your debit card.

    Six reasons why your debit might get declined

    There could be several reasons why the merchant has declined your (or should we say Martin’s) card; here are six of the most common:

    1. There was a technical error

    Sometimes, the error lies with the merchant rather than a problem with your card. For example, payment might not be taken if the website times out, and the merchant will have to process your order again.

    In a store, there might not be receipt paper in the till, or the merchant’s software isn’t up to date, causing problems with the functionality of the till machine. Using another till or trying your online purchase again can usually solve these problems.

    2. You reached your daily purchase limit

    Finance administrators using spend management solutions will have access to corporate card controls and policies. They might have put daily spending limits in place to control company spending, which you’ve now reached.

    As a finance leader, you might consider increasing the daily fund limit on the cardholder’s account or turning on a workflow that lets them ask for more funds easily and have them approved by a designated manager. You may even set an auto-approval for small fund requests.

    3. Your card is expired or inactive

    The transaction won't go through if you try to use an expired card. Card issuers usually send out new bank cards near the expiration date to remove delays in spending. If you haven't received a new bank card, contact your card issuer as soon as possible to resolve.

    Your card may be inactive if it hasn't been used before or is inactive. At Payhawk, our customers can activate Payhawk Visa cards online through the portal.

    4. The bank flags the purchase as suspicious

    Many banks have built-in fraud detection systems. For example, if you spend a lot more money than usual or make a handful of purchases on the same day, the bank might block your card until they can verify that you, as the cardholder, are making these purchases.

    The bank will usually send you a message via SMS asking you to confirm recent transactions. And you'll be free to use your card again shortly after the card issuer verifies the legitimate purchase.

    5. Your card is suspended

    Your card issuer can suspend your corporate card if it's deemed non-compliant with its terms of use for security reasons or due to changes in issuer policy. If you're a Payhawk customer and you have a suspended card, contact your dedicated Payhawk account manager, and they'll be able to resolve it.

    6. The merchant doesn’t accept your card

    In the UK, for example, Mastercard and Visa are more widely accepted by retailers than American Express, so if you’re using a card that most merchants don’t accept, you might run into card decline issues more frequently. The best way to combat this is to work with corporate card issuers with global acceptance.

    Debit card declined? Five steps to fixing it

    As a finance leader, ensuring your coworkers can pay for what they need (within policy) is one of your biggest priorities. Naturally, you don’t want them stuck without funds and want to help them get back up and running as soon as possible.

    Here are five important steps to share with them:

    1. Check for insufficient funds

    Always check to see if you have sufficient funds in your account first, as this is one of the most common reasons for card decline.

    2. Verify your card details

    If you’re making a purchase in-store, is your PIN correct? If you complete the purchase online, double-check that the information you enter is correct. Expiration date, card number, and CVC, etc. It’s common for cardholders to mistype their details when making a purchase online, resulting in failed transactions. If your card is out-of-date, all transactions will decline, so take notice of your expiry date.

    3. Contact your bank

    As the cardholder, contact your internal finance team; they might have automatically blocked your card, or you might have hit your daily spending limit and not realised. Either way, it’s best to get clarity before continuing. If it’s a problem with the issuer, your finance team will contact them directly to resolve it.

    4. Check for suspicious activity

    If your payment was declined and you notice suspicious activity in your recent transactions, your bank may have blocked your card. If your bank has asked you to verify your recent transactions, respond quickly to get your card up and running again.

    If you're one of our customers at Payhawk and you notice suspicious or fraudulent activity, you can block your corporate card immediately through the Payhawk portal.

    5. Try an alternative payment method

    If you don't have time to investigate why your card has been declined, consider using an alternative payment method, perhaps another debit or credit card, to complete the transaction.

    And one extra tip…. Don't panic. There could be several easy-to-fix reasons why. Try the payment again to rule out technical issues or clear your cache if purchasing online before jumping to conclusions.

    How to avoid having a card declined

    Now, back with your finance hat back on — you know your finance techstack can make or break your business agility.

    Choosing a reliable and trustworthy card provider can help reduce the risk of cards declining. And working with a provider who’s on hand 24/7 to help resolve any card issues promptly is a must, too.

    At Payhawk, we have one of the lowest card decline rates when it comes to corporate expenses. And to top it off, our cards are accepted by more than 46 million merchants worldwide.

    Before you go

    By following the simple steps outlined above, you can drastically reduce your chances of your card declining for future transactions. Safeguard your cardholders against routine card problems by choosing a reliable card provider like Payhawk. And leverage cards that aren’t directly linked to the funds in your corporate account and instead stand alone, making them the perfect deterrent for card fraud or theft; there’s no risk to your central funds.

    Manage and track spending in real-time for both physical and virtual cards for all employees across multiple entities. Maintain accountable spending and embrace streamlined expense management with Payhawk.

    Schedule a demo to see our corporate debit cards in action.

    Trish Toovey - Content Director at Payhawk - The financial system of tomorrow
    Trish Toovey
    Senior Content Manager

    Trish Toovey works across the UK and US markets to craft content at Payhawk. Covering anything from ad copy to video scripting, Trish leans on a super varied background in copy and content creation for the finance, fashion, and travel industries.

    See all articles by Trish →

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