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The 05: Do Not Honor card declined response is the well-nigh common and general 'decline' message for transactions that are blocked past the bank that issued the card. This week Finance Monthly hears from Chris Laumans, Adyen Product Owner, on the complexities of this mysterious and vague transaction response.

05: Do Not Laurels may exist the largest frustration for whatsoever merchant that regularly analyses their transactions. Although it frequently accounts for the majority of refusals, it is also the vaguest reason, leaving merchants and their customers at a loss nigh how to human action in response.

Although unfortunately there isn't an like shooting fish in a barrel, unmarried respond most what this refusal reason ways, there are several suggestions as to what could be the cause backside the non-descript message. And then what might the 05: Do Not Honor mean? From our experiences analysing authorisation rates and working with issuers and schemes, here are some plausible explanations.

Bereft funds in disguise

In probably half of the cases, 05: Practise Not Honor is likely but an Insufficient Fund refusal in disguise. Reality is that some issuers (or their processors) practise a poor job of returning the advisable refusal reasons back to the merchants. This is both due to the use of legacy systems at the issuer side as well in that location being no mandates or monitoring by the schemes on this, letting issuers continue to utilize it as a blanket term.

By looking at the data from various banks, it is easy to see how "Do Not Honor" and Insufficient Funds tin can frequently be used interchangeably. Records that evidence a disproportionately high level of Do Not Laurels and a depression level of Bereft Fund refusals would suggest one masquerading as the other. Given that Insufficient Funds is one of the near mutual refusal reasons, 2^nd maybe only to "Do Not Award", it makes sense that "Do Non Honour" by some banks may actually represent Insufficient Funds.

Refusal due to credential mismatches

Although the words "Exercise Not Honor" aren't the nigh revealing, sometimes other data points in the payment response can be clues for the refusal. Obvious things to look at are the CVC response, carte du jour expiry appointment, and, to a lesser extent, the AVS response. For lack of a amend reason, issuers will frequently default to using "05: Do Not Accolade" every bit the take hold of-all bucket for other denials.

Suspicion of fraud

The most appropriate use of "05: Do Non Honor" would be for declining transactions due to suspicious activity on the card. In some cases, although the menu is in good standing and has not been reported lost or stolen, an issuer might choose to err on the side of caution due to a combination of characteristics on a given transaction. For case, a high value transaction fabricated at 3am from a strange based merchant without any extra authentication, likely will trigger a few too many take chances checks on the issuer side. These types of refusals will again unfortunately be designated into the "05: Exercise Not Honor" category, with merchants drawing the short straw. Fifty-fifty though issuers may exist able to point to specific reasons why the transaction was refused, issuers have no manner to communicate this back to the merchant.

Some astute merchants might bespeak out that issuers should exist able to employ "59: Suspected fraud" in these cases. Some issuers still remap these 59 refusal reasons to 05 before sending the response to the acquirer to protect shop owners in the POS environment and avoid uncomfortable situations with the shopper standing in front of them.

Collateral damage

Finally, the reality is that your probable not the only merchant that a given shopper interacts with. Regardless of how good your business is or how clean your traffic is, a shopper'south recent history with other merchants will influence the issuers decision on your transaction. For lack of a better reason, the take hold of-all 05: Do Not Accolade refusal in some cases be seen as "Collateral damage". If the shopper coincidentally just made a big purchase on a high-risk website or went on a shopping spree before reaching your store, there is the possibility that the issuer may decline the transaction at that moment in time. In these cases, there is unfortunately very little that can be done, except to ask for another card or to endeavor once more after.

Hopefully this helps shed some low-cal on the possible reasons why '05: Do Non Honor' is then dominant in the payment space and that there is no single reason for this response. Adyen's communication to dealing with these refusals is to look at the data at individual issuer/BIN levels and from there, try to distil patterns particular to those bank's shoppers.

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Source: https://www.finance-monthly.com/2018/08/understanding-05-do-not-honor/

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