“Transaction failed” –the bane of every transaction initiator. A failed transaction is not an unusual term, at least not among individuals who perform transactions. In fact, the chances of you experiencing a failed transaction are higher than the chances of having a random person send you money. Everyone who has been hit with the dart of a failed transaction always has one question and thought in their minds: “will I be refunded?”
Failed transactions often get refunded and refunds are automatic. If you didn’t receive a refund on a failed transaction after some days, ensure you contact your bank.
Sometimes, transactions fail. And when they do, you’ll certainly want a refund. But is it possible to get a refund on such transactions? What causes a transaction to fail in the first place? I have provided comprehensive answers to those questions in this article.
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Do Failed Transactions Get Refunded?
Did you initiate a transaction that failed? If so, read this. But before you do, it’s important you understand the step-by-step process of a typical transaction.
Transaction Process Step by Step:
Have you ever experienced an online payment? If so, you would understand that the entire process doesn’t take time. But, in the background, there are many steps and several parties involved. The payment goes through various stages before reaching the acquiring bank, which raises the number of reasons for transaction failure.
- Customer Order Created
The customer selects the products and moves toward the checkout. There he fills in the necessary details. The Order ID is made on the website after the information is transferred to API then the payment gateway API is created.
- Send Payment Details
Then the customer proceeds to make the payment at the payment gateway checkout. He inputs the details according to the payment method option chosen. Concerning the payment option, the details are sent to the Payment Gateway server in a secure manner. So in this step, the card networks, wallet service providers, etc., are included.
- Authorization of Payment
This is an internal process. Here, the payment gateway sends the authentication request to the issuing bank to remove the customer’s payment. If the authorization is obtained, the payment is deducted and sent to the acquiring bank. The payment is auto captured on the merchant side after the bank has approved it and the purchase is considered complete.
Will you be refunded for a failed transaction?
A failed transaction occurs when your account is debited for a transaction that failed to give you the intended value. Of course, when a failed transaction occurs, you expect a refund. But is that always the case? Will you be refunded for a failed transaction?
Of course, you will be refunded. It is standard practice for banks and other financial institutions to initiate refunds on failed transactions. In fact, the refunds are often automatic—you don’t need to visit or call the bank to initiate the refund. However, if you wait for some days and nothing happens, contact your bank.
Cause of Failed Transactions:
After understanding the steps involved in the transaction process, let’s understand why the transactions fail.
- Connectivity
Since payment processing needs the internet to work, any connectivity problem may result in a failed transaction. Even if there is only fluctuation in the network speed, the payment may fail. In other cases, the user may have unintentionally closed the browser before the process was completed. The payment process will fail in all scenarios.
- Downtime
The online payment process entails several intermediaries like payment gateways and credit card firms, among others. If any of these constituents are undergoing downtime, the payment may fail. In most cases, the companies announce their downtime beforehand so their clients can schedule their payments accordingly. But, in other cases, such downtime may be unplanned. It is also crucial to stick to any applicable time constraints.
For instance, some transactions may be undertaken only during certain hours. If you try a transaction outside such hours, your transaction will certainly fail.
- Security Problems
Financial intermediaries may decide not to process the payment if they aren’t convinced about the authenticity of the transactions. Such refusal causes the payment process to fail. The reason may be as simple as the bank not finding the transaction based on the customer’s normal spending habit.
This often happens when there is a charge from a foreign country. The customer’s bank may mark the transaction if it observes any security threat. In other cases, the payment gateway may reject the payment if it is above the threshold set by the merchants.
- Wrong or missing data
Online payments have a strict requirement regarding authenticating the data. The transactions will be declined if there is even a little mismatch between the data and your credentials.
If the customer inputs the wrong password or OTP, the banks may choose to decline the payment. To ensure the security of financial payments, the financial institutions may also impose time limits within which the transaction must be completed. It is crucial to stick to such directions.
Even if the data is inputted correctly but missing an element, the payment transaction will be rejected.
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- Other Reasons
In addition to these broad categories, there are many other reasons why a transaction may be declined. Sometimes, the reason may be as simple as a lack of funds in the customer’s account.
If the transaction the customer is carrying out is more than the limit of their debit or credit card, then the payment will fail. Another reason may be that their selected payment option may not be on the list of approved methods.
