Global Payments adds Visa data tool to cut wrongly declined cards

Global Payments says it has found another way to stop banks from turning away good customers at checkout. On Monday, Nov. 9, the payment company announced it added Visa's Intelligent Data Exchange API to its Adaptive Authentication platform. The goal is to cut false declines, which are legitimate card payments that get rejected by mistake, and to smooth out online checkouts.

What changed

The new tool lets merchants send richer details about a purchase straight to the bank that issued the customer's card while the payment is being approved. An API is simply a way for two computer systems to pass information to each other. With more context, the bank can make a better call. The company says this should mean fewer unnecessary challenges for cardholders and more completed sales.

Adaptive Authentication uses artificial intelligence to judge each transaction in real time and pick a fitting verification method. Depending on the risk of the purchase, it can use 3D Secure, Data Only authentication, Strong Customer Authentication exemptions or the new Visa tool. The company also uses fraud and risk technology from Ravelin.

Who it affects

Merchants selling online are the main audience, and the Visa feature is limited at first. It works only for eligible domestic transactions in the United States and Canada. The wider Adaptive Authentication suite is already used internationally.

Shoppers may notice it indirectly. If banks get better information, fewer legitimate purchases should be blocked or interrupted.

Why false declines matter

John Winstel, a senior vice president at Global Payments, said every declined legitimate customer is lost revenue. A PYMNTS Intelligence study backs up the scale of the problem:

• 85% of merchants say balancing fraud prevention with an easy customer experience is their main challenge.
• Nearly half estimate false declines wipe out up to 5% of their legitimate sales.
• The study puts the industry loss at about $50 billion a year.
• PYMNTS research says lost sales from false rejections often exceed losses from actual fraud.

What is not known yet

Global Payments says its existing Data Only authentication and AI optimization tools have typically raised merchant approval rates by 4% to 6%. That figure is for earlier tools, not for the Visa feature. The announcement gives no results for the new tool, no pricing and no date for expanding beyond the U.S. and Canada. The performance claims come from the company itself.