The content of this article is provided for informational purposes only. You should always obtain independent business, tax, financial, and legal advice before making any business decision.
Tackling excessive transaction retries can help reduce the cost of compliance.
Card networks like Visa and Mastercard have rules for how many times a payment can be retried, and the fees merchants must pay if they exceed these thresholds. Fees can be levied on every non-compliant transaction, and routine non-compliance could lead to significant financial, operational, and reputational risks for enterprises.
Non-compliance with network rules can result in unwanted costs. Following guidance from the networks on excessive retries prevents rule violations, saving money and averting reviews. Below we will explain how you can help your business remain compliant with guidance from Visa and Mastercard.
Visa3 breaks down decline respond codes into four categories. Category 1 declines are considered hard declines, and no reattempts are allowed when a transaction is declined. Merchants will incur fees on any Category 1 retry after a decline. Categories 2-4 are considered soft declines and Visa allows 15 reattempts in 30 days on these declines. Merchants will incur fees on any retry beyond 15 retries in 30 days.
Visa evaluates reattempts of the initial declined transaction using data including, but not limited to, Acquirer, Acquirer Identifier, Card Acceptor ID (CAID), Token/PAN, and transaction amount.
Note: Visa evaluates reattempts based on presence of the same credential presented: Token to token, Primary Account Number (PAN) to PAN. If a token is tried, declined, and then a PAN is tried, this won’t count towards the retry limit and won’t incur fees.
Codes in this category indicate that the card is invalid, never existed, or blocked.
Do not attempt to reauthorize these transactions. Cardholders can be advised to contact their bank for further information.
Fees will be applied on any retries for Category 1 declines.
Domestic retries (US, CA, EU, LAC, AP) = $0.10 USD
Cross Border retries (US, CA, EU, AP) = $0.15 USD
Cross Border retries (LAC) = $0.25 USD
Codes in this category can indicate several reasons that the Issuer cannot authorize the purchase at the time. However, they may authorize the transaction later. Examples might include credit risk, issuer velocity controls of the consumer, or temporary system outages.
Attempts can be made to reauthorize these transactions.
An Excessive Reattempt fee will apply after 15 retries in 30 days:
Domestic retries (US, CA, EU, LAC, AP) = $0.10 USD
Cross-border retries (US, CA, EU, AP) = $0.15 USD
Cross-border retries (LAC) = $0.25 USD
Codes in this category indicate that the Issuer cannot approve based on the details provided, such as an incorrect Card Verification Value 2 (CVV2) or expiration date.
Attempts can be made to reauthorize these transactions. Before another attempt, based on the response, obtain additional or updated information from your customer.
An Excessive Reattempt fee will apply after 15 retries in 30 days:
Domestic retries (US, CA, EU, LAC, AP) = $0.10 USD
Cross-border retries (US, CA, EU, AP) = $0.15 USD
Cross-border retries (LAC) = $0.25 USD
All other Response Codes, many of which are technical and limited value/meaning to merchants. Issuers will be subject to enforcement actions when not following rules to use codes in Categories 1-3 and limiting codes in Category 4.
Attempts can be made to reauthorize these transactions.
An Excessive Reattempt fee will apply after 15 retries in 30 days:
Domestic retries (US, CA, EU, LAC, AP) = $0.10 USD
Cross-border retries (US, CA, EU, AP) = $0.15 USD
Cross-border retries (LAC) = $0.25 USD
Mastercard can provide Merchant Advice Codes (MAC) on declines. MACs are meant to provide merchants and acquirers with more information when retrying a decline. The goal of MACs are to drive authorization rate performance while reducing declines. There is no opt-out option for MACs as Mastercard sees these as a value add to the ecosystem. The MACs in scope for retries are 03 and 21. Merchants should not attempt to retry a transaction when either of these codes are received4.
Fees are applied through Mastercard’s Transaction Processing Excellence (TPE) Program. Fees apply when an Acquirer submits an authorization request that is declined with a MAC value of 03 or 21 and a subsequent retry is attempted in past 30 days.
Mastercard penalizes excessive retries as part of its Transaction Excellence Program (TPE), a series of transaction monitoring initiatives to drive compliant behavior. Mastercard will allow 10 retries in a 24-hour period, then charge for subsequent retries. Mastercard began charging $0.30 USD per transaction for over 35 retries in a 30-day period in January 2024 and plans to increase that fee in 2024 to $0.50 USD per transaction in 2025.
PayPal Braintree can help optimize your retry strategy with Smart Retries. Leveraging machine learning and by analyzing data from previously declined transactions, Smart Retries can help optimize how and when you retry declines, including advising against retrying when the recovery chances are low, helping to save time and reduce excessive retry costs.
You can find more information on Smart Retries and other Braintree optimization tools here.
Braintree helps enterprises comply with the latest network requirements by continually monitoring them and recommending best practices. These insights can help manage cost exposure associated with card networks, full PCI compliance, and detect fraud.
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