Read “The Global State of Commerce 2026” report
“I need a better payment optimization plan” isn’t usually a thought when checkout seems to be working. Orders are going through, revenue looks steady and there’s no obvious reason to look too closely. Then a payment fails and a customer opens a support ticket. Your team starts digging in and realizes it’s not an isolated issue: Similar orders have been failing quietly for weeks. Or worse, months.
That’s when the picture changes. What looked like a one-off turns out to be a pattern, and the cost isn’t just a few failed transactions. It’s orders that should have gone through but didn’t, customers who don’t come back and problems hiding in parts of the payment flow no one had reason to question before. At that point, payment optimization stops being something you think about “eventually” and starts to feel like work you can’t put off any longer.
Below, we’ll walk through where these issues tend to show up and strategies you can use to fix them.
TL;DR
|
What is payment optimization in ecommerce?
Payment optimization is the practice of increasing the percentage of legitimate ecommerce orders that successfully complete checkout, without adding customer friction or increasing fraud risk.
Why it matters for merchants
Payment optimization matters because failed payments stop real orders from going through. A customer can be ready to buy, but if their payment is declined, stalled or never reaches the bank to begin with, the sale is often lost.
In most cases, shoppers aren’t told why their order didn’t go through. They don’t see issuing bank authorization results or the fraud rules merchants use to manage risk. Instead, they’re usually shown a generic message that says their payment was declined or their order couldn’t be processed. According to Signifyd’s State of Commerce 2025 Report, 19% of shoppers who are turned away without a clear reason abandon the transaction and shop with another retailer instead and 16% give up the transaction altogether.
Picture this: You’re a mid-sized fashion retailer with an average order value of $60. You’re reviewing your analytics report and you notice that 25,000 customers experienced a payment decline over the last 12 months. Of those declined shoppers, 19% abandoned their cart and went to another retailer. That’s 4,750 customers who collectively spent $285,000 elsewhere. And if 16% give up on the transaction altogether. That’s an additional 4,000 customers who never complete the purchase, representing $240,000 in lost orders that never converted.
The impact doesn’t end there. Even when customers return to a retailer after experiencing a decline, they typically spend 17% to 24% less. On a $60 order, that’s a $10 to $14 drop per purchase. So, if those 4,750 customers eventually do come back and place just one additional order, that reduced spend alone can add up to another $47,500 to $66,500 in lost revenue.
But what can cause those declines in the first place?
Reasons why legitimate payments can fail at checkout
When a good order fails at checkout, it usually breaks because of one (or a combination of) the following issues.
Customers can’t use their preferred payment method
Some payments fail even before getting to the checkout stage. In fact, research shows that 42% of U.S. customers abandon purchases if their preferred payment method isn’t available. That can happen when a familiar wallet isn’t supported, region-specific payment options are missing or a certain card type can’t be processed. For example, a customer shopping on their phone may expect to check out with Apple Pay. When that option isn’t there and they’re asked to manually enter card details instead, many don’t bother — they close the tab and buy from another retailer who accepts more payment types.
Payment processing errors and timeouts
Payments can also fail because the payment flow itself breaks. That can look like a gateway timeout, a processor outage, a wallet handoff that doesn’t complete or a stalled checkout.
Banks don’t authorize the transaction
In some cases, good payments are rejected because the issuing bank declines the transaction during authorization. Those decisions are made quickly using a narrow set of signals which can lead to real orders being turned away by accident.
For example, a shopper on vacation in Sweden realizes his headphones are broken after he boards a train to the next city on his itinerary. He orders a new $250 pair from his favorite electronics retailer’s website from his phone and uses his hotel’s address for same-day delivery. With limited context behind the order and a few red flags, including a foreign IP address and a foreign shipping address, the bank declines the transaction out of caution.
Overly cautious fraud controls
Some legitimate orders are blocked by merchant-side fraud controls after the bank has authorized the transaction and sent it to the merchant for approval. When rules are too rigid or models lack enough context, good customers can be incorrectly identified as risky, stopping orders that would otherwise move forward to fulfillment. A repeat customer placing an order from a new device, for example, may be flagged and falsely declined by a fraud system, even though their bank has already authorized the payment.
Signs you may need to optimize your flowNot every payment issue is easy to spot, but there are a few key signals that usually point to missed revenue opportunities:
|
Payment optimization strategies for ecommerce merchants
Once you know where your payment flow is breaking down, the next step is to make adjustments that lower friction at checkout, influence bank authorization rates and raise your payment approval percentage — all while still protecting legitimate orders.
Offer multiple payment methods
Make it easy for customers to pay the way they prefer. That includes major wallets like Apple Pay, plus local options where they matter. For example, supporting alternative payment methods like Venmo or Paypal can remove unnecessary friction for shoppers who don’t want to type card details at checkout.
Reduce technical payment failures
Some payment failures happen because the payment flow itself breaks. That can be caused by timeouts, misrouted transactions or missing data as the payment moves between your checkout, payment provider and acquiring bank.
These issues usually stem from overly complex payment setups, incomplete information being passed along or transactions being sent down paths that were unlikely to succeed from the start. And treating all declines the same way — without distinguishing between temporary issues and hard stops — can make the problem worse.
Fixing these failures usually starts with simplifying the payment flow. When payments don’t have to bounce between multiple systems and retries are used carefully, more good transactions make it to the issuer for review.
Stop risky orders before they reach issuers
When issuing banks see risky traffic from a merchant, they tend to respond cautiously. And that caution causes good customers to get caught in their fraud net.
Filtering out obvious fraud earlier using a solution like Signifyd’s Authorization Rate Optimization (ARO) helps prevent that. By stopping clear fraud attempts before they ever reach the authorization stage, you reduce unnecessary declines and avoid paying authorization fees on transactions that were never going to succeed in the first place. Sending clean traffic to issuers also creates a virtuous cycle: Banks will authorize more transactions based on a merchant’s solid track record.
Give issuers more context behind good orders
Historically, issuers have made decisions with limited data. When a legitimate transaction doesn’t match a customer’s typical buying habits, like the $250 headphones example, issuers may decline it because they don’t have enough context to confidently approve the order.
By sharing with the issuer the order score and decision along with insights based on details only you see on the merchant side during the transaction — i.e. IP address, device ID and email — you give them a fuller picture of the shopper and the risk behind the transaction. When shared with ARO in place, that added context helps banks confidently authorize up to 3% of more good orders while still blocking truly risky ones.
Improve revenue recovery after declines
Some payment declines are inevitable. What matters is what happens next. When the path forward is unclear or frustrating (like having to restart the entire checkout process) many customers give up. But when the next steps are clear, more customers are likely to try again.
To save the sale after a payment is declined, you should allow a certain number of retries if it was a “soft” decline (i.e. a connectivity issue) or provide alternate payment methods without making your customers re-enter all of their information or rebuild their cart altogether.
Tune your fraud controls to lower false declines
Fraud controls are meant to stop risk, but when they’re too rigid, they can also block orders placed by genuine customers. Over time, this shows up as repeat customers getting declined or higher decline rates tied to specific situations like new devices, travel or cross-border purchases. Reviewing where rules or thresholds are catching real customers helps identify which controls are creating unnecessary friction. The goal isn’t to loosen everything, but to apply more nuance so real customers aren’t treated the same way as true fraudsters.
Drive long‑term growth with ongoing payment optimization
If you want to get the most value from your payment optimization efforts, it’s important to treat it as an ongoing project that you revisit regularly — adjusting how payments flow, how risk is handled and how you share context with issuers as customer behavior and fraud patterns change.
Signifyd’s Commerce Protection Platform and ARO solution have been built to support that work by filtering obvious fraud before authorization and sharing richer merchant-side context with issuers. Together, they help reduce false declines, improve authorization rates, boost approval rates and increase customer satisfaction — all while protecting against fraud.
Want to see ARO in action? Schedule a demo today.
FAQs
What are some examples of payment optimization strategies?
Payment optimization strategies include offering the payment methods customers prefer, simplifying the payment flow to reduce technical failures, filtering obvious fraud before bank authorization, sharing better order context with issuers and tuning fraud controls to reduce false declines.
How does fraud prevention fit into payment optimization?
Fraud prevention plays a key role in payment optimization by stopping risky activity early and preventing good orders from getting caught in overly cautious controls. When fraud decisions are more accurate, fewer real customers experience declines and issuers are more likely to approve legitimate transactions.
What results can I expect from payment optimization?
Payment optimization can lead to higher approval rates, fewer false declines and less checkout abandonment from payment failures. Over time, those improvements translate into more completed orders, better customer experience and less revenue lost from avoidable issues.
