Why do payments sometimes fail?

The last few months have been exciting for BigPay. Our user base has been growing strong. More and more people are using the card for their everyday spending. We’ve added features that make our lives easier. We even made the news a few times.

But all of this becomes relatively unimportant when a top up or a payment fails.

Why do payments sometimes fail?

It’s Monday morning. You’re rushing to work, but first: breakfast. You go to your favorite mamak that actually lives in 2018: it has a payment terminal. You order their signature nasi lemak, flush it with teh tarik. But at the cashier, disaster strikes: your card’s been declined.

To understand why payments fail, we need to understand how payments work. There are two sides to a transaction: an authorisation and a settlement. When you’re paying for something or withdrawing money, the merchant asks us to create an authorisation.

This is where we put a fence around the amount in your account. It’s deducted from your balance and subsequently, you can’t spend it on anything else. The transaction is shown as ‘Pending’, but the merchant has yet to confirm the transaction.

The merchant will then come back to confirm the bill. In other words, that’s when the transaction is settled and money is collected. It can take up to a week, but usually no more than 48 hours. For you, it doesn’t change anything, as the balance you see is the same.

That’s when the transaction’s status goes from ‘Pending’ to ‘Settled’. ‘Pending’ means that the merchant has a fence around your money but hasn’t confirmed it. ‘Settled’ means that the merchant has effectively collected the amount for your account.

What about refunds?

There are two case scenarios. First, the money has been deducted from your account but hasn’t left it: the transaction is pending. Merchants can then simply choose to not confirm the transaction and the money will be released to your account.

If the money has already been collected, they must then make the refund by ‘credit presentment’. Put simply: they’ll send money back to your account. This will appear in your BigPay account.

Other reasons for declined transactions

These are common reasons why a payment might fail.

1. Not enough balance - if you’re trying to buy something but you don’t have enough funds, we’ll decline the authorisation request when it reaches us and the terminal will deny your card.

2. Wrong PIN - unless you’re making a contactless payment, the terminal will ask for your PIN to prove you’re the cardholder. Your entry is encrypted and sent to us for verification. Learn how to change your BigPay card’s PIN.

3. Wrong CVC - card validation codes (CVCs) are designed to make your payments safer. When you make a payment online, most websites will ask you to enter the 3-digit CVC at the back of your card. We’ll decline the payment if it’s wrong.

4. Contactless payment limit - you can only pay up to RM250 per day using our card’s contactless feature. Beyond that, the terminal will return an error - but can you still use Chip & PIN!

Why do top ups sometimes fail?

When a user tries to top up money into a BigPay account, we send a request from our payment gateway, that gets passed to the acquiring (BigPay’s) bank, which is then routed to the issuing bank (via Mastercard, Visa, or direct) to confirm that there are enough funds available on that person’s account. If everything is clear, we then top up your account.

Very rarely, but for a variety of reasons (such as the number of transactions being processed at that time...), sometimes returns an error message is returned from somewhere in the chain - between the payment gateway to the issuing bank to our systems. That's when the money is deducted from the user's bank account, but not yet reflected into the BigPay account.

Your money is still safe and guaranteed in a trust account. But we need to manually reconcile double check our records to make sure everything is a match and funds are going to the right person - this is usually done in under 24 hours.

That’s it! We hope this is helpful and that you’ve learnt a few things along the way. If you have any question, shoot us a message on Facebook, Instagram or via in-app messaging.