Soft Declines Are a Revenue Infrastructure Problem - Not Just a Retry Problem

Why payment recovery architecture determines authorization performance at scale

Executive Summary

Soft declines are often treated as an operational issue solved with retries, routing tweaks, or acquirer switching.

At scale, they are none of those things. They are an infrastructure signal.

• Most soft declines are recoverable authorization failures, not permanent payment failures.
• Issuer authorization systems are probabilistic, not deterministic.
• Card networks enforce structured decline categories and resubmission rules - making blind retry strategies both ineffective and potentially non-compliant.
• Durable approval lift comes from treating recovery as a dedicated architectural layer, designed to influence authorization probability in real time.

Organizations that treat soft declines as retry logic capture incremental gains.
Organizations that treat them as infrastructure unlock measurable revenue.

The difference is architectural.

What Is a Soft Decline?

A soft decline is an authorization rejection that is not permanent and may be recoverable if conditions change - such as authentication completion, correct data inclusion, or improved issuer context.

Checkout.com defines soft declines as temporary authorization failures that can be retried under the right conditions and distinguishes them from hard declines, which reflect permanent failure states such as closed accounts or lost/stolen restrictions.
Source: https://www.checkout.com/blog/when-should-merchants-prepare-for-soft-declines

Soft declines can represent a significant share of overall declines - reported by Checkout.com as approximately 80-90% in certain breakdowns - which makes them financially material.
Source: https://www.checkout.com/blog/when-should-merchants-prepare-for-soft-declines

Issuer Decisioning Is Probabilistic - Not Merchant-Controlled

An authorization request is evaluated by an issuer’s automated risk system.

Stripe explains that declines are driven by issuer decisioning models that evaluate transaction signals, spending behavior, account status, and risk indicators.
Source: https://docs.stripe.com/declines

These systems are inherently probabilistic. Many legitimate transactions are declined due to issuer uncertainty rather than confirmed fraud. Stripe refers to these as false declines.
Source: https://stripe.com/resources/more/false-declines-explained

This variability creates the recovery opportunity. If a decline is not permanent, system design determines whether that same transaction intent can convert into approval.

Approval performance is therefore not just a payment metric.
It is a revenue metric.

SCA and “Authentication Required” - A Canonical Soft Decline

In digital commerce, one of the most common soft-decline patterns is authentication required.

Adyen documents that an AUTHENTICATION_REQUIRED response indicates the issuer mandates Strong Customer Authentication (SCA) and explicitly categorizes this as a soft decline.
Source: https://help.adyen.com/en_US/knowledge/3d-secure/3ds-response-codes/why-do-i-get-an-authentication-required-response

Checkout.com further explains that when an authorization requires SCA because authentication was not performed, the issuer should return a soft decline and the merchant should retry the transaction using EMV 3DS.
Source: https://www.checkout.com/blog/how-and-when-to-retry-sca-related-soft-declined-transactions

In these cases, recovery is not “retry later.”
It is “retry correctly.”

Infrastructure must support authentication invocation, correct data propagation, and compliant reattempt handling.

Network Rules Make “Retry Everything” a Losing Strategy

Retries are governed by scheme rules.

Visa groups authorization response codes into categories and provides guidance for how merchants and acquirers should manage resubmissions.
Source: https://support.visaacceptance.com/knowledgebase/knowledgearticle/?code=000003859

Visa also issued formal rule updates governing declined transaction resubmission and authorization response code handling.
Source: https://usa.visa.com/dam/VCOM/global/support-legal/documents/updates-to-rules-for-declined-transaction-resubmission-and-use-of-authorization-response-codes.pdf

This framework pushes payment systems toward:

• Precise decline classification
• Compliant retry governance
• Intelligent recovery paths rather than brute-force resubmission

Blind retry logic increasingly creates risk - not lift.

Why Orchestration Alone Does Not Solve Soft Declines

Modern stacks rely on:

• Scheduled retries
• PSP routing logic
• Multi-acquirer orchestration
• Decline-code rules

These mechanisms improve coverage. But they operate after issuer rejection and rarely add the missing approval condition.

They do not reliably:

• Introduce required authentication context
• Adjust data completeness in real time
• Operate inside the issuer decision window

Approval optimization is increasingly treated as a data-driven problem. Mastercard describes its Payment Optimization Platform as evaluating over a trillion combinations of data elements in near real time to increase authorization approvals.
Source: https://www.mastercard.com/us/en/news-and-trends/press/2025/october/Mastercard-Payment-Optimization-Platform-uses-the-power-of-data-to-drive-more-approvals.html

The direction is clear: authorization performance is becoming an optimization discipline.

Recovery as a Dedicated Infrastructure Layer

A modern payment stack can be modeled as distinct layers:

1. Processing layer - gateway and acquiring connectivity
2. Fraud and authentication layer - risk decisions and 3DS
3. Orchestration layer - routing across providers
4. Recovery layer - real-time conversion of high-probability non-permanent declines into approvals

The recovery layer focuses on transactions that meet three conditions:

• Temporary issuer rejection
• High probability of approval if retried correctly
• Legitimate cardholder intent

This layer captures revenue from existing demand without requiring additional acquisition spend.

Approval uplift compounds at scale because it converts transactions that already exist.

The Revenue Impact of Recovery Infrastructure

For PSPs, acquirers, and PayFacs, approval performance directly affects:

• Processed volume
• Merchant lifetime value
• Enterprise retention
• Unit economics

Recovery infrastructure enables:

Revenue capture without additional demand
Incremental approvals increase volume from existing transaction intent.

Reduced approval volatility
Additional decision pathways reduce dependency on a single issuer outcome.

Merchant retention driven by performance
Large merchants benchmark providers primarily on approval rates.

Margin expansion with limited incremental cost
Approval uplift flows directly into platform economics.

Few infrastructure investments offer comparable leverage.

Where Better Fits

Better operates as an advanced, real-time, guaranteed payment recovery layer.

It is designed to recover high-probability false declines during the authorization window, with economics aligned to successful recovery outcomes.

Better is complementary to orchestration.
Orchestration selects the best path.
Recovery converts recoverable issuer outcomes into approvals.

More at: https://www.bettercharge.ai/

The Architectural Shift

Payments infrastructure has evolved through waves:

• Gateway abstraction
• Multi-acquiring orchestration
• Tokenization and authentication optimization
• Fraud decisioning platforms

Recovery infrastructure is the next layer.

Issuer variability is not disappearing. Distributed risk systems operating under uncertainty will always generate soft declines.

Organizations that design for that reality build structural approval advantages.

Conclusion

Soft declines are not edge cases. They are a predictable output of probabilistic issuer decisioning operating under scheme governance.

Treat them as retries and you capture incremental gains.
Treat them as infrastructure and you unlock durable revenue lift.

Authorization performance is no longer just an operational KPI.
It is a competitive growth lever.

The difference is architectural.

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