Digital Commerce

Nine Ways to Improve Authorization Performance

Part one in a series exploring authorization best practices and improvements


As digital commerce increases the speed and volume of card payments, it can be challenging for merchants to maintain high authorization approval rates while controlling processing costs, complying with payment brand rules and safeguarding against fraud. The authorization process authenticates credit or debit cards and confirms an account’s capacity to fund a transaction. Awareness and adoption of authorization best practices can improve approval rates by eliminating factors that lead to declines and optimizing the submission of authorization requests.

In a store, when a card payment is declined, a customer may simply use a different card or pay with cash to complete a sale. That’s not an option for e-commerce businesses that keep customers’ payment card details on file to facilitate pay-as-you-go and recurring payments. In such environments, monitoring and measuring authorization approval rates can help protect revenue and provide continuity to customer relationships.

As a leading card issuer and transaction acquirer, we serve both cardholders and merchants by enabling billions of card payments every year. Through this unique perspective and data-driven insights, we have identified nine ways that merchants can improve authorization performance:

  1. Perform account updates to replace or remove expired card-on-file details
  2. Submit authorization requests on the optimal day of the week and time of day
  3. Maintain an informed retry strategy to avoid repeated declines
  4. Always transmit accurate and complete authorization data
  5. Identify the specific card types that negatively impact authorization rates
  6. Ensure the correct merchant category code is used to identify your business or organization
  7. Compare multiple transaction routing methods to identify the highest performing method
  8. Understand the way tokenized transaction data impacts authorization rates
  9. Be aware of issuer-specific authorization data, transaction size and presentment currency requirements

The authorization approval process is designed to create an efficient, secure and predictable digital payment experience. By adopting authorization processing best practices, merchants can maintain the proper balance between revenue optimization and fraud protection.

As both a card issuer and a payment processor, J.P. Morgan is uniquely positioned to help our clients improve authorization performance. In 2017, Chase cardholders used their credit and debit cards to spend more than $900 billionfootnote 1. At the same time, J.P. Morgan helped merchants authorize $1.2 trillion in card payments from customersfootnote 1.

Our relationship managers work proactively with their clients to help them measure and improve authorization approval rates. To learn more about our authorization optimization strategies and other ways we help merchants manage risk, cost and complexity, contact your JPMorgan Chase representative.

Part two of this series will take a closer look at the importance of account updates.

1 2017 JPMorgan Chase & Co. annual report

Insights