Cardflo for Businesses needing better approval rates.
Achieving high approval rates is paramount for high-risk businesses to ensure consistent revenue streams and customer satisfaction.
Cardflo's payment orchestration platform employs advanced routing, cascading, and 3DS optimisation to navigate complex acquiring landscapes, ensuring that transactions are directed to the most appropriate channels for successful authorization.
- Industry
- Businesses needing better approval rates
- Category
- High-risk
- Cardflo support
- Yes
The overview
Approval rates represent the percentage of authorisation requests successfully processed by an issuer. For merchants in sectors classified as high-risk, authorisation represents a persistent friction point due to conservative risk appetites within the traditional banking stack.
Transactions often undergo rigorous scrutiny from issuing banks, resulting in elevated decline rates even for legitimate customer behaviour.
The mechanics of improving these rates involve a combination of precise Merchant Category Code alignment, robust Technical Message formatting, and the strategic distribution of volume across multiple Merchant Identification Numbers.
By distributing transaction traffic according to issuer preference and historical performance data, a business can mitigate the impact of local outages or sudden shifts in acquirer risk tolerance.
This orchestration layer sits between the merchant checkout and the final settlement bank, ensuring that every authorisation attempt is structured and routed to maximise the probability of a positive response from the financial institution.
How it works
Intelligent Transaction Routing
Traffic is directed to specific acquirers based on the Bank Identification Number and historical success rates for that merchant category.
By analysing past authorisation patterns, the platform selects the path that is most likely to result in an approved transaction, avoiding issuers or regions known for high refusal rates.
Automated Smart Cascading
When a soft decline occurs, such as a temporary technical error or insufficient funds, the transaction is immediately retried through a secondary acquirer.
This failover process happens in real time, preventing the customer from seeing a failure message and captured revenue that would otherwise be lost to technical friction.
Optimised SCA Protocols
Strong Customer Authentication requirements are managed through precise 3DS versioning. By favouring 3DS2 where supported, the merchant can provide enriched data points to the issuer.
This transparency reduces the perceived risk, leading to fewer false declines while maintaining full compliance with PSD2 regulations and scheme rules.
Dynamic Data Enrichment
Before sending an authorisation request, the transaction data is formatted to meet the specific requirements of the target acquirer. This includes ensuring correct MCC usage and providing valid Address Verification System data.
Accurate formatting reduces the likelihood of an issuer declining a transaction due to missing information.
Why it matters
Recovery of Lost Revenue
Unnecessary declines, often called false positives, directly impact the bottom line. Research suggests that a significant portion of declined transactions are legitimate.
By refining the routing logic and using automated retry mechanisms, merchants can recover this revenue without increasing their marketing spend, effectively lowering their customer acquisition costs through better backend efficiency.
Stable Merchant Account Longevity
Concentrating all volume through a single MID increases the risk of account termination if decline or chargeback ratios spike. Spreading volume across a diversified portfolio of acquiring partners protects the core business operations.
If one partner changes their risk appetite, the merchant can shift volume elsewhere, ensuring continuous processing and operational resilience.
Regulatory notes
PSD2 and SCA Compliance
Within the European Economic Area, the Payment Services Directive 2 requires Strong Customer Authentication for most electronic payments. Failure to correctly flag transactions as out-of-scope or failing to provide a 3DS challenge when required will lead to immediate declines by issuers.
Managing these regulatory requirements through automated triggers ensures that merchants remain compliant while minimising the impact on approval rates.
Card Scheme Data Standards
Visa and Mastercard have strict integrity programmes regarding authorisation data. Merchants must ensure that transaction indicators, such as those for recurring billing or credential-on-file, are accurately represented.
Incorrectly coded transactions can lead to fines from the schemes and significantly lower approval rates, as issuers prioritise traffic that adheres to standardised data formats.
Use cases
Subscription and Recurring Billing
Merchants relying on Merchant Initiated Transactions face high decline rates when cards expire or balances are low. Using account updater services and smart dunning ensures higher success for recurring cycles.
Cross-Border E-commerce
International transactions are often flagged as high risk. Routing these through local acquirers in the customer's region significantly increases approval rates by avoiding the complexities of cross-border processing.
Regulated Financial Services
Businesses in the crypto or forex sectors experience volatility in issuer approval. A multi-acquirer strategy allows these firms to maintain high throughput even when specific banks block certain MCCs.
Digital Goods and Services
High-velocity, low-value digital transactions are susceptible to fraud filters. Precise 3DS optimisation allows for frictionless authentication for low-value payments, reducing abandonment while ensuring authorisation success.
By the numbers
This represents the typical increase in successful transactions observed by merchants when moving from a single-acquirer setup to a multi-acquirer strategy with smart routing.
General industry data indicates that a significant volume of declines can be avoided through better data formatting and 3DS version management.
Estimated percentage of soft declines that result in a successful authorisation when immediately cascaded to a secondary payment processor.
Related terms
Book a scoping call to see how Cardflo would set you up.
What's included.
- Distribute transaction volume across multiple MIDs to reduce single-point failure risks.
- Utilise secondary acquirer failover for real-time recovery of soft decline authorisations.
- Map Merchant Category Codes accurately to ensure compliance with specific scheme rules.
- Implement Card-on-File and recurring flags correctly to improve issuer trust levels.
- Leverage network tokens to minimise declines associated with expired or replaced cards.
- Analyse refusal reason codes to identify and rectify systemic authorisation bottlenecks.
- Customise 3DS challenge triggers to balance security with high conversion rates.
- Format authorisation messages with enhanced metadata to satisfy issuer fraud scoring models.
- Monitor real-time performance metrics to identify acquirer-specific downtime or latency issues.
- Employ Address Verification Systems and CVV checks to validate legitimate consumer transactions.
Talk to an acquiring specialist about your MID setup.
Common questions.
How do soft and hard declines uniquely impact merchants in high-risk categories seeking better approval rates?
For high-risk businesses, a soft decline often occurs due to overly cautious fraud filters or temporary issuer restrictions rather than simple technical timeouts. These instances may be recoverable through strategic intelligent routing or by engaging with a payment orchestrator that understands specific industry risk profiles.
In contrast, a hard decline typically stems from permanent issues like card cancellation or a blacklisted account which no amount of rerouting can bypass.
High-risk merchants should focus on analysing soft decline codes to identify patterns where transactions might be successfully retried through an alternative acquiring partner.
Successfully distinguishing between these decline types allows a business to refine its authorisation strategies and potentially recapture lost revenue without increasing its overall risk exposure.
How does using multiple acquiring partners improve my overall authorisation percentage?
Different acquirers have varying relationships with local issuing banks and different risk tolerances. By using a multi-acquirer setup, a merchant can route a transaction to the acquirer with the highest historical success rate for a specific card type or region.
Furthermore, if one acquirer experiences a technical outage or a sudden surge in declines, the volume can be shifted to a secondary partner, ensuring the business maintains a stable and high approval rate.
Will implementing 3DS always lead to higher approval rates for high-risk merchants?
While 3DS provides a liability shift and adds a layer of security, it can also introduce friction that leads to cart abandonment.
However, from an authorisation perspective, many issuers are more likely to approve a transaction that has been authenticated via 3DS2, as it provides them with more data to assess risk.
The key is to implement 3DS selectively or use frictionless flows where the data suggests the issuer will approve the transaction without a manual challenge.
What role does the Merchant Category Code play in approval rate optimisation?
The MCC tells the issuer what type of business is requesting the funds. Certain codes are flagged as higher risk, leading to stricter fraud filters.
If a merchant is misclassified or using a generic code that does not match their actual business activity, they may see higher decline rates.
Correctly aligning your MCC with your acquiring partner ensures that the issuer's risk model is accurately applied to your specific industry sector.
How can network tokens improve my success rate for recurring payments?
Network tokens are issued by the card schemes and remain valid even if the physical card is lost or expires. Because the token is linked to the underlying account at the scheme level, records are updated automatically.
Transactions processed with network tokens often see higher approval rates because the issuer recognises the credential as secure and current, reducing declines related to outdated card details.
Does transaction routing increase the latency of my checkout process?
In a well-optimised payment orchestration environment, the routing decision-making process happens in milliseconds. The primary latency would only be visible if a retry or cascade occurs, as the system must wait for the first response before attempting the second.
However, this small delay is generally considered preferable to a flat decline, as it results in a successful sale that would have otherwise been lost.
Ready for velocity?
Tell us about your business. We'll match you with the right acquiring partners and the right route, typically inside a week.