What is a Declined Transaction Response?
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A situation in which a financial Transaction is denied in response to an Authorization decision.
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How Does a Declined Transaction Response Work?
Whenever a cardholder uses a credit or debit card to purchase a service or product, that Credit Card's Number is either entered into a website for an online Transaction or swiped at a Point-of-Sale (POS) terminal for an in-person Transaction. That credit card information is then sent to the bank of the merchant, or the Acquiring Bank, to the Issuing Bank, or the bank that initially gave the card to the cardholder. Using an Authorization Code, that Issuing Bank will check to see if the cardholder holds sufficient funds for the Transaction, as well as ensure that the card is not stolen or fraudulent. If the cardholder’s account does not hold sufficient funds (or if the card is stolen or fraudulent), the Issuing Bank will send a Declined Response back through the Acquiring Bank, and to the website or Point-of-Sale terminal; this message will alert the merchant to decline the Transaction.