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What are payment authorisation rates?
Payment authorisation rate is the share of attempted payments that are approved by issuers, first time, without manual intervention. Think of it as the conversion rate for your payments layer. It’s influenced by dozens of signals: card type and issuer, AVS/CVV accuracy, 3DS outcomes, tokenisation status, fraud risk scores, routing logic, device and behavioural data, and even time of day.
Formula-wise, it’s straightforward: approved transactions ÷ total attempted transactions (for a defined period, channel, market, or method). The nuance lives in the segments. Best-in-class teams track authorisation by processor, BIN, market, card scheme, wallet, and product line and then optimise where the friction (or false declines) actually live.
Why is it important to optimise payment rates?
Because every decline is more than a lost sale, it’s lost revenue, a frustrated customer, and avoidable operational cost. Fragmented setups can drain 3–5% of annual revenue, support teams' burn time is spent chasing failures, and outages can cost £9,000 per minute, with 40% of retailers experiencing issues during peak periods.
Lift your authorisation rate and you compound wins: higher conversions at checkout, better customer satisfaction and LTV, fewer chargeback disputes from mismatched data, and cleaner signals to issuers that reduce future false declines. In short, smoother payments don’t just fix problems; they create competitive advantage.
12 Ways to optimise your payment rates
1. Deploy Pay in Your Currency (PYC/DCC) with transparent pricing mechanisms
Picture this: A German business traveler shopping for expensive watches in a New York store. They're about to buy, but then they stop. Why? They're confused about currency conversion, which creates problems that turn buyers into people who walk away.
Pay in Your Currency fixes this payment optimisation problem. Modern PYC systems instantly convert prices across more than 135 currencies, showing customers exactly what they'll pay in a currency they understand. The trick is showing options, not pushing them. Display both the local price and converted amount clearly. Give customers a choice. This openness doesn't just improve payment success rates, it also makes you extra money through conversion fees.
2. Utilise Tokenisation for enhanced security and reduced transaction friction
Think of Tokenisation as your payment gateway optimisation tool and security guard that never sleeps. It protects customer information by replacing real card details with meaningless codes, a simple answer to tricky security problems.
The results speak for themselves: stores using Tokenization see fraud drop by about 26%. But there's more to it than just security. When customers can buy with one click, there's no digging for wallets or retype card numbers, and more payments get approved. This payment conversion optimisation really works.
This not only helps subscription businesses significantly, but also helps repeat customers improve their payment authorisation rates. Network tokenisation is the next step, where card companies themselves create tokens that work at multiple stores. The global tokenisation market is expected to grow from $3.95 billion in 2023 to $7.5 billion by 2028. This isn't just a fad, it's how secure payment processing will work in the future.
3. Implement intelligent payment routing and strategic acquirer selection
Not all payment processors perform equally when it comes to approval rates, and innovative businesses are capitalising on those differences. Imagine if every transaction were instantly routed to the processor most likely to approve it, based on real-time analysis of dozens of variables. This isn’t science fiction; it’s already happening.
This is transaction routing optimisation at work. The system evaluates key details, including your location, the card being used, the transaction amount, and the time of day. Within milliseconds, it chooses the optimal route to maximise the chances of approval. For example, Checkout.com improved its merchant approval rates by +3.046% using attempt-based routing, proving that smart routing really works.
For businesses asking, “Why are payments getting declined?” the culprit is often poor routing logic. By implementing innovative issuer decline recovery methods, such as retrying with alternative acquirers, you can avoid unnecessary rejections and boost performance. Successful routing isn't guesswork. It's data-driven, region-aware, and constantly fine-tuned.
4. Execute proper 3D Secure 2.0 implementation
Upgrading from 3D Secure 1.0 to 2.0 is one of the most effective ways to enhance payment security, but many businesses still get it wrong. The original version often frustrated customers with clunky, interruptive verification steps. In contrast, 3D Secure 2.0 is designed to operate behind the scenes, delivering stronger security without disrupting the checkout experience.
The key lies in data. Instead of forcing every customer to verify their identity, 3D Secure 2.0 analyses over 100 signals, like device type, IP address, purchase history, and behavioural patterns, to determine whether additional authentication is necessary. When configured correctly, most legitimate transactions are approved instantly and silently.
Adoption is growing rapidly. According to Ravelin’s 2023 report, global use of 3D Secure 2.0 surged from 1% to 17% in just one year. The shift is happening because it not only streamlines the customer journey, it also helps reduce false payment declines that often occur when online payments fail during checkout.
When comparing 3D Secure vs fraud filters, remember: the goal isn't more friction, it's smarter risk detection. To make it work, merchants must feed the system rich, accurate data: shipping and billing addresses, device fingerprints, account age, and typical spending behaviour. When the balance is right, 3D Secure 2.0 doesn’t just protect transactions, it helps more of them go through, increasing your overall success rate.
5. Rectify incomplete or inaccurate payment information
Accurate payment data is critical for successful payment authorisation. Every missing address, incorrect billing detail, or mistyped card number increases the risk of failure and drags down your approval rates. Fortunately, modern validation tools can catch and correct these issues before they cause a transaction to fail.
Consider the mobile checkout experience. Small text fields lead to typos, autocorrect alters street names, and users frequently enter incorrect ZIP codes. Intelligent validation systems act like real-time proofreaders, detecting errors as they happen. They recognise card types from the first few digits, validate addresses on the fly, and flag suspicious expiration dates or CVV mismatches before the payment is submitted.
This matters more than ever as mobile commerce grows. Mobile now accounts for 73% of online shopping in the U.S., making streamlined, error-resistant forms essential to improving approval rates. According to Shopify, 42% of online sales occurred via smartphones in 2022, a figure expected to reach 44% by 2025. The best systems utilise BIN (Bank Identification Number) lookups to identify the country that issued the card and the required format, then adjust the forms to match different card types, thereby reducing payment failures.
6. Harness machine learning for sophisticated fraud detection
Traditional fraud detection systems operate like rule-bound security guards—relying on rigid criteria to make binary decisions. Today’s AI fraud detection in payments behaves more like seasoned investigators, analysing hundreds of subtle signals to distinguish between genuine customers and fraudsters.
The impact is undeniable. In 2024, the U.S. Treasury reported recovering over $4 billion in fraudulent or erroneous payments thanks to improved fraud detection systems powered by machine learning a staggering 513% increase from $652.7 million in 2023. It’s no surprise that over 55% of payment professionals now cite AI and machine learning as the most transformative forces in the industry.
These systems assess vast amounts of data in real time from purchase history and device fingerprints to behavioural biometrics and geolocation. Within milliseconds, they assign risk scores to each transaction. And they never stop learning, constantly adapting to emerging fraud patterns while improving their ability to identify legitimate payments.
The result? Higher approval rates, reduced false declines, and stronger protection without friction. Smart fraud detection doesn’t just stop bad actors; it lets more good customers through and boosts payment success with machine learning.
7. Develop optimised retry logic and decline management
In payment processing, a decline doesn’t always mean the end of the transaction. Many failures, known as soft declines, are temporary and can be recovered from with the right strategy. By using intelligent retry logic, businesses can turn failed attempts into approved payments and boost overall authorisation success rates.
The key is understanding why a payment failed. A response like “try again later” may succeed within minutes, while a “not sufficient funds” error might be resolved after a payday. On the other hand, a hard decline like “invalid card number” will never succeed on retry, and repeatedly attempting it can actually harm approval performance.
Smart systems automate this decision-making process. They analyse decline codes, customer history, transaction context, and issuer behaviour to determine when, how, and whether to retry. PayPal, for example, uses dynamic wallet logic that automatically switches to a backup payment method if the first card fails, demonstrating the power of optimised recovery flows.
By tailoring retry attempts to the reason behind each decline, merchants can significantly improve success rates without triggering fraud alerts or damaging issuer trust.
8. Offer comprehensive payment methods and transactional flexibility
Consumer payment preferences have shifted dramatically, and businesses that fail to adapt risk losing out. In 2023, mobile wallets accounted for nearly half of all online transactions globally, making them the most popular method for digital purchases.
Offering a broad range of online payment methods isn’t just about convenience; it’s a proven way to increase approval rates, reduce payment declines, and improve online payment success rates. Digital wallets like Apple Pay, Google Pay, and PayPal often see higher approval rates due to their layered security features. These include biometric authentication (like fingerprint or facial recognition), device-level encryption, and tokenisation, all of which increase issuer confidence and improve transaction success.
Local payment methods work great for selling internationally and boosting global payment authorisation rates. They cater to the preferences of people in each country while helping more transactions succeed. Customers trust payment brands they recognise. Banks process local payment methods more easily. The result? Higher payment approval rates and happier customers in different markets.
9. Monitor and address velocity and volume triggers
Payment systems operate within a complex network of monitors that track for unusual patterns. While these protect against fraud, they can also block real businesses having sudden growth or holiday rushes if you're not prepared.
Speed checks operate on multiple levels. A successful sale that doubles your regular orders might look suspicious to automated monitors. What happens? Failed card payments at checkout, and reduced authorisation rates during peak periods.
If you’ve ever struggled with a payment processing error fix, the root cause may be undetected volume spikes. Talking to your payment partners ahead of time is crucial. Many processors allow proactive communication before high-traffic events, essentially “training” the system to expect surges and prevent false positives.
10. Cultivate robust relationships with acquirer and issuer communities
Behind every payment transaction is a network of relationships that can help or hurt your payment authorisation rates. Processors who understand your business, your busy seasons, and your growth plans can help improve your approval rates significantly more than those who view you as just another account.
PayPal works with over 400 million shoppers and 36 million merchants, as well as banks and card companies, in 200 countries. This shows how large partnerships facilitate improved approval rates by providing a deep understanding of how all components work together.
When processors truly understand your business, including how it operates when it gets busy, how it's growing, and who your customers are, they can adjust their systems to help you. Building this trust means keeping your numbers accurate and up to date. Low refund rates, effective fraud prevention, and steady transaction amounts demonstrate your professionalism and reliability, which pays off in better approval support.
11. Deploy comprehensive testing and monitoring protocols
Payment systems often run smoothly, until they don’t. Issues usually begin quietly: a slight dip in approval rates here, a few more failed transactions there. By the time the problem becomes obvious, it’s already affecting revenue and customer trust.
Real-time monitoring provides early warnings that prevent small payment failures from escalating into disasters. Sound systems track hundreds of measurements across different areas, by processor, card type, location, purchase amount, and time, letting you see both instant alerts and patterns over time to optimise authorisation rates.
12. Integrate payment infrastructure for unified processing
The final piece of the authorisation puzzle is integration. Fragmented payment systems introduce friction, increase failure points, and make it harder to diagnose or prevent issues. It’s no surprise that 81% of small businesses now prefer integrated payment solutions; many have learned firsthand the cost of juggling disconnected vendors and systems.
Consolidated platforms simplify operations. Instead of managing multiple gateways, processors, and contracts, businesses can focus on a single, optimised infrastructure. This streamlined approach reduces complexity and improves performance, two key factors that contribute to the low approval rates commonly observed across fragmented tech stacks.
If you're evaluating the best payment gateway for approval rates, look for platforms offering dynamic routing, Tokenization, fraud AI, and unified reporting. Tokenization alone can increase approval rates by 2–3%, particularly for subscription-based businesses. When all payment data flows through one system, you gain visibility into customer behaviour and transaction outcomes, making optimisation easier and more impactful.
Building sustainable payment success through optimised authorisation rates
The most effective payment authorisation optimisation strategies don’t work in isolation; they function as a connected system. These twelve methods to optimise payment processing are interlocking components that transform payments from a back-end task into a strategic growth lever.
Higher approval rates set off a virtuous cycle: happier customers, fewer support issues, and greater confidence to scale. Each improvement amplifies the next; lower friction leads to more completed sales, which in turn builds trust, loyalty, and revenue.
Ready to increase approval rates and reduce payment declines? Planet’s integrated platform unifies intelligent routing, tokenisation, PYC (Dynamic Currency Conversion), and advanced fraud AI, giving you the best payment gateway for approval rates in one seamless solution.
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