What are the common reasons for payment rejection?

Payment rejection can occur due to various factors in Open Banking transactions. While this list is not exhaustive, here are some common reasons why a payment might be rejected:

  • Insufficient Funds: If the PSU's account does not have enough funds to cover the transaction amount, the payment may be rejected by the bank.
  • Technical Issues: Temporary technical glitches or downtime in the bank's systems can lead to payment rejection. This could include issues with connectivity, server errors, or maintenance periods.
  • Incorrect Account Information: Providing incorrect or invalid account details, such as the recipient's account number, sort code, or IBAN, can lead to payment rejection. It's essential to double-check and verify the accuracy of all account information before initiating a transaction.
  • Authentication Failure: Payments made often require strong customer authentication (SCA). If the PSU fails to provide the necessary authentication credentials, which includes PINs, passwords, or authentication codes, the payment may be rejected.
  • Payment Declined by PSU: The PSU may actively decline the payment for various reasons, such as change of mind, suspicion of fraud, unauthorised transaction etc.
  • Regulatory Compliance: Banks are required to adhere to strict regulatory guidelines, and payments may be rejected if they violate any of these regulations. This could include transactions to restricted entities or suspicious activities flagged by anti-money laundering (AML) measures.
  • Fraud Prevention Measures: Banks employ fraud detection measures to flag suspicious transactions. If a transaction is deemed potentially fraudulent, it may be rejected to protect the account holder.
  • Account Limitations: Sometimes, accounts may have specific restrictions or limitations. These can include things like blocked payments for particular merchants or countries, or account statuses like closed, blocked, or transactions forbidden for a certain account type. If a transaction violates these restrictions, it may be rejected.
  • Transaction Limits: Some banks impose daily or transactional limits on payments. When the payment amount exceeds these limits, the transaction may be rejected.

If you encounter payment rejection issues, the reason for rejection can be seen in the response body with additional details in the statusreasoninformation field as an answer to the endpoint from POST/transfers, GET/transfers or GET/transfers/{transferid}.

Please note: This is not an exhaustive list, and there may be other reasons specific to individual banks or payment scenarios that could lead to payment rejection. It's essential to double-check all payment details, ensure proper authentication, and adhere to the relevant regulations and guidelines to minimise the risk of payment rejection in Open Banking transactions. 


Also check out our help centre articles below:

Understanding Payment Status Updates and Polling Mechanisms

What are the ISO20022 statuses?

What Error Codes does Token.io support?

If the rejection reason remains unclear, please contact our support team here. We're happy to help!


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