What are transaction retries?

When a shopper tries to make a card purchase at your business, a transaction can be declined due to a number of factors. The next attempts to complete the transaction using the same card is called retrying.

Important: Card transactions (both card present or not-present) and Zero Auth (card validation) are also subject to the card brand rules for retrying.

What has changed?

Each card brand defines the amount that will be charged for retrying. The number of times a transaction will be retried also varies by brand.

Are transaction retries allowed in e-commerce?

Card brands define different rules for present and non-present card transactions, like in online sales.

What is the impact for the merchant?

Merchants who do not follow the rules will be penalized by charging fees for exceeded transactions, in accordance with each brand program.

Aiming to improve the shopping experience, the payment methods industry, together with ABECS, promoted the standardization of the response codes for rejected transactions made by card. Attempts are classified as:

• ❌Irreversible: Never retry.
  It means, for example, that the card was canceled for use, has been lost or stolen, there is confirmed fraud, the transaction is not allowed for that product, indicating that there are no circumstances in which the issuer would grant an approval. Any authorization attempt that has previously received an irreversible refusal without any changes in the message will not be successful.

• ✅ Reversible: Retry allowed.
  It means that the issuer can approve, but cannot do so now, possibly due to a system issue (down) or lack of limit, suspected fraud or exceeded number of password attempts. These are temporary opt-out decisions made by the issuer that may change over time.

The Visa, Mastercard and Elo brands adjusted their rules to limit the number of authorization attempts for a denied transaction. These changes provide for the charging of fees for excessive attempts. Below are the rules for each brand.

• Mastercard;
• Visa;
• Elo;
• Demais bandeiras.

Mastercard

The Mastercard brand has the Transaction Processing Excellence (TPE) program, which includes two categories:

• Excessive Attempts – monitors the attempts of denied transactions, in card present and not present environments. Valid for both reversible and irreversible denial codes.

• Merchant Advice Code Transaction Excellence (MAC)– monitors transaction retries that are denied, in card-not-present environments that are irreversible. Billing only on (MAC) 03 and 21.

1. Excessive Attempts

These are charges made when the merchant exceeds the rules for retrying transactions.

The brand also performs monitoring for any approved nominal value authorization, with subsequent reversal for transactions below 1 unit of whole currency or the equivalent of US$ 1.

Monitoring is applied to retry transactions for denied and approved purchases, carried out in a present and non-present card environment.

Excessive Attempts Table

• All payment transactions using the same card and the same merchant number will be considered as retries;

• Mastercard has extended the effective date to 01/02/2023 regarding the new program rules (Excessive Attempts) previously scheduled for the beginning of 01/11/2022. These are the changes:

• 1. The excess considered in the program will occur from the eighth attempt within the calculation month. The amount charged has changed.
• 2. Mastercard is also introducing a limit of 35 failed attempts on the same card and merchant number per continuous 30-day period. Even if the shopper does not exceed the limit of 7 retries in a 24-hour period, but exceeds the monthly limit, the charge will be applied

Note: The current rule of the Excessive Attempts program is valid until 01/31/2023, where only 10 attempts to approve the same transaction are allowed (on the same card, and same merchant number), with retry allowed after 24 hours.

2. Merchant Advice Code Transaction Excellence (MAC)

These are charges made when the establishment re-attempts to send authorization for irreversible response codes with the same valid card for a card not present.

Within this retry program, there are programs that are specifically designed for the “Do not try this transaction again” scenario. For these cases, Mastercard identifies transactions with the following values: MAC 03 and MAC 21, for example.

The MAC program accepts a few values, however only MACs 03 and 21 have a specific charge. The other MACs do not fall under this MAC 03/21 charge.

The other MAC codes (01, 02, 04, 24, 25, 26, 27, 28, 29, 30, 40 and 41) are not included the MAC billing program but are included in the Excessive Attempts program billing if you exceed the limits.

Since 10/14/2022 Mastercard has introduced new MAC codes 24, 25, 26, 27, 28, 29 and 30, when an issuer declines a transaction with the response code 51 (Insufficient Funds) followed by one of the MACs below, for the merchant to take the best action.

MACs codes table

Some return codes will no longer be sent:

• 04 (Capture Card)
• 14 (Invalid card number)
• 43 (Stolen Card)
• 54 (Expired Card)
• 57 (Transaction Not Allowed)
• 62 (Card Restricted)
• 63 (Security Breach)

Categorization of Mastercard returns

Mastercard may consolidate some issuer response codes, which often may not indicate to the merchant whether or not to retry, into 3 codes for Mastercard exclusive use:

• 79 (Life cycle)
• 82 (Policy)
• 83 (Fraud/Security)

The original codes will be replaced by the Merchant Advice Code (MAC), which will accompany codes 79, 82 and 83 to determine whether or not the transaction can be re-attempted.

For example:

MAC 03 and MAC 21 retry program

Method of calculation:

• Card not present transactions will be considered;
• All payment transactions using the same card and merchant number are considered retries;
• Retries in the MAC program with values ​​MAC 03 and MAC 21 count;
• Valid for any response code,
• The excess accounted for in the program will occur from the 1st attempt within the calculation month;
• The counter is reset after a period of 30 days;
• Retries may be charged for MACs 03/21 and Excessive Attempts if you exceed the limit for each program;
• Currently, the tariff value of BRL 1.25 is applied and this value will change from January 1, 2023, as shown on the table;

Table of values:

Visa

Visa may allow a certain number of new attempts to approve a transaction depending on the refusal code returned after the first declined attempt.

The goal is to create balance in the transactions ecosystem so to guarantee that both acquirers and merchants provide accurate information about retrying transactions and decrease unnecessary attempts.

Visa demands that issuers present the correct and non-generic codes to make it easier to identify the reason why a transaction was declined.

Visa classifies those codes in reversible and irreversible, both for card present and card not present transactions:

• Reversible codes: Visa allows up to 15 attempts to approve the same transaction (with the same card, transaction, expiration date, amount and merchant) within 30 days. After 30 days, from the first attempt, any retry will be charged.

• Irreversible codes: Visa allows only the first attempt to approve the transaction (with the same card, transaction, expiry date, amount and merchant). From the second attempt, every retry will be charged, at any period of time.

Fess: when the attempts limit for Visa is reached, every excessive attempt will be charged:

• Brazilian card: USD 0,10 + 13,83% taxes;
• Foreign card: USD 0,25 + 13,83% taxes.

* Fees have been charged since April, 2021.

Visa grouped the response codes into four categories:

• Category 1: issuer will never approve

  The card was cancelled or never existed or the refusal is the result of a permanent restriction or error that prevents an approval in the future.

• Category 2: the issuer cannot approve at the moment

  The refusal is the result of a temporary condition such as credit risk, issuers velocity controls or other card restrictions that may allow the transaction authorization when retried. In some cases, the refusal requires an action from the cardholder or the issuer to remove the restriction before authorization is granted.

• Category 3: data quality

  When a data error is identified by the issuer, the transaction is declined. The merchant must check the payment data before retrying the transaction. Merchants and acquirers must monitor the refusal codes due to potential exposure to frauds.

Warning: Category 3 has a cumulative limit. A merchant can perform up to 25,000 transactions within 30 days (considering the merchant number and refusal codes). If the limit is surpassed, all declined transactions due to a category 3 response code will be charged.

• Category 4: Generic response codes
  Category 4 includes all other decline response codes that are not in categories 1, 2, and 3, as there may be circumstances where there is no response code value for a specific decline condition. Issuers may use other response code values defined in the VisaNet Technical Specifications; however, their use should remain minimal.

Issuers should use response codes that more accurately reflect the reason for declines. That is, focus on categories 1 (the issuer will never approve), 2 (the issuer cannot approve at this time), and 3 (data quality) and avoid using category 4 (generic response code). Issuers should limit this category as much as possible. The Category 4 fee is charged to ensure that no more than the regionally approved percentage of the issuer's total declines are categorized as Category 4. Issuers that exceed the regionally defined limit will incur the Generic Response Code Fee on a per-transaction basis for each decline in excess of the defined limit.

Issuers must use response codes that reflect more precisely the refusal reason.

Table with rules and refusal codes (action codes) for Visa:

The rules presented in the table below are valid for both sale and Zero Auth transactions:

* Code 14 will be reclassified from 04/24/24, but remains on category 1.

** Codes 39, 52, and 53 will migrate from category 4 to category 2.

* *Code Z5* is a new code and is in category 2.

Important:
Since April, 2023, the limit for the total of declines for category 3 went from 10,000 to 25,000 declines in a 30-day billing cycle.

Elo

What is it?

This is a program instituted by ELO that generates charges when the merchant exceeds the rules for retrying transactions with the same card.

Forms of Calculation

• Retries: all payment transactions on the same card, validity, value, Merchant ID (MID) - within 30 days
• Accounted codes: all negatives​
• Excess: from the 16th retry in the month​*
• Fee: BRL 0.80 (eighty cents) per retry, starting from the 16th
• Billing: The billing will only be done in cases of recurrence, therefore, the establishment must be at least 2 consecutive months in the program.
• Excess accounting: It is based on Elo's internal controls. 1st to last calendar day of the month.

List of refusal codes:

The response codes below are listed according to the brand's authorization manual.

Other brands

• Reversible codes: New attempts will be allowed for the same customer and card. There is no limit and pre-established period;

Important: you should follow the guidance received in the response to the transaction denied, before making a new attempt.

• Irreversible Codes: Authorizations will not be allowed for the same card or establishment, after receiving the 1st refusal response from the issuer.