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11/07/2026 8:26 pm
TL;DR: Banks decline about 15% of legitimate orders, and Signifyd argues merchants can lift approval rates by sending cleaner data, richer context and better identity signals, with one percentage point translating into 2,000 additional monthly approvals in a 200,000-order example. The lesson for practitioners is that authorization performance is increasingly an identity and data-quality problem, not just a payment-routing problem.
NHIMG editorial — based on content published by Signifyd: 5 strategies to increase bank authorization rates for merchants
By the numbers:
- According to Signifyd data, banks falsely decline about 15% of legitimate orders.
- A strong bank authorization rate averages around 85% for online merchants.
Questions worth separating out
Q: What breaks when merchants rely on issuer declines without adding identity context?
A: Merchants lose visibility into why legitimate customers are being blocked, and issuers are forced to decide from partial signals.
Q: Why do card-not-present transactions create more false declines?
A: Card-not-present transactions remove physical verification cues, so issuers lean on weaker digital signals and conservative risk models.
Q: How can security and fraud teams tell whether step-up authentication is helping?
A: Look for higher approval rates on borderline transactions without a matching increase in checkout abandonment.
Practitioner guidance
- Implement risk-based step-up policies Use 3D Secure or equivalent challenge flows only for transactions that cross a defined risk threshold, and exempt low-risk repeat customers where conversion loss would outweigh incremental assurance.
- Feed issuers cleaner identity and order data Standardise billing, shipping, device and behavioural fields before authorisation requests are sent, and flag malformed or incomplete records upstream.
- Filter obvious fraud before authorisation Suppress bot traffic, expired cards and low-confidence orders before they reach the issuer.
What's in the full article
Signifyd's full article covers the operational detail this post intentionally leaves for the source:
- The author’s worked examples for calculating authorisation rate impact from false declines and monthly order volume.
- The practical breakdown of 3D Secure, merchant-authenticated identity and issuer-facing data enrichment in checkout flows.
- The five-way breakdown of why authorisation rates fall across CNP traffic, geography, regulation and transaction size.
- The article’s implementation-oriented explanation of cleaner traffic screening before authorisation requests reach the issuer.
👉 Read Signifyd's analysis of how merchants can improve bank authorization rates →
Bank authorization rates and identity signals: what should merchants do?
Explore further
11/07/2026 8:56 pm
Authorization performance is becoming an identity governance issue, not only a payments issue. The merchant-authenticated identity concept shows that trust signals now shape whether a transaction survives issuer scrutiny. That matters because many fraud programmes still separate checkout risk from identity assurance, even though the two are operationally linked. Organisations should govern transaction identity as part of the same control plane that handles customer verification and high-risk access decisions.
A question worth separating out:
Q: Who is accountable when legitimate transactions are declined too often?
A: Accountability usually sits across payments, fraud and identity teams because false declines are a shared control failure. The merchant owns the quality of the signal it sends, the fraud team owns screening and risk tuning, and the identity team owns the trust evidence attached to the customer session. Good governance defines which team can change each decision point and how the impact is measured.
👉 Read our full editorial: Bank authorization rates expose the identity gap in ecommerce fraud
