What are Authorization Response Codes?

What’s in a code? Apparently, quite a lot!

When you, as a merchant, attempt to process a consumer’s credit card, the issuing bank of that consumer’s credit card needs to make a decision regarding that specific request. The issuing bank ultimately makes their determination based upon a wide range of screens, heuristics, analytics and “AI” to determine the outcome of the transaction.

Regardless of the outcome, the issuing bank (via your processor) is going to tell you what the outcome is via a numerical code with a description.

While there are standardized response codes (e.g., “0” for approvals) what you receive in your response payload will vary based upon the payment processor and/or gateway that you’re using. Also, be aware that these entities frequently add or re-map authorization codes which can throw a wrench in your reporting and operations.

From a categorization standpoint, authorization response codes come in three general flavors. The first is “Approved”. This means you’ve been successful in your request for funds. Second is what is called a “Soft Decline”. This category is made up of things like “over limit” where the customer has no available funds on their card. The third category is “Hard Declines”. This category is made up of things like “Stolen Card” or “Account Closed”.

Historically, I think it is safe to say, authorization response codes have been a neglected area of analysis for merchants. The extent of the analysis has been limited to whether or not an authorization code is a “Hard” or “Soft” decline and the impact on a merchant’s reauthorization strategy.

The authorization response process is evolving at the card associations and becoming increasingly more complicated. In order to maximize revenue, and minimize expense, you need tools to help unlock the opportunities that lie within your authorization response data.

June 20, 2024