In April, insufficient funds became the most common reason that consumers’ payments were declined, according to “Digital Economy Payments,” a PYMNTS report based on a survey of 3,067 U.S. consumers.
Get the report: Digital Economy Payments
Twenty-seven percent of consumer payment declines were due to insufficient funds, while 25% were caused by incorrect payment information being entered and 24% were because the activity was thought to be suspicious.
Recent PYMNTS research revealed that about two-thirds of consumers lived paycheck to paycheck. Sudden upticks in prices can devastate consumers already under financial pressure.
The relative frequency of the reasons for consumer payment decline has changed since the previous month. In March, insufficient funds was only the fourth most cited reason for payment declines.
In March, 30% of declines were due to activity thought to be suspicious, 26% were due to incorrect payment information being entered, 19% were due to an expired card and 18% were due to insufficient funds.
The causes of consumer payment declines vary depending on whether a consumer shopped in-store or online.
Online, entering incorrect payment information was the most prevalent cause of transaction failures, causing 30% of canceled transactions.
This may indicate the need for more intuitive checkout processes, as poor user experience design may be at fault.
The second most common cause of consumer payment declines when the consumer is shopping online is activity thought to be suspicious, which causes 28% of payment declines.
When consumers shop in-store, the most common cause of consumer payment failures is insufficient funds.
The next most common reasons are incorrect payment information entered, activity thought to be suspicious and card data stolen and suspended — each of which was cited by 18% of consumers who recently experienced declines.
The causes also vary depending on which payment methods consumers used.
For those using a credit card, the most common reason for declines was an activity that was thought to be suspicious.
For consumers using a debit card or other payment methods, the most common cause was insufficient funds.
