Payment failures can happen for a number of reasons, each of which is given a reason code by the customer's bank according to why the payment couldn't be collected.
Each Direct Debit scheme uses its own set of codes, however the reasons behind them are similar across all.
Common reasons for payment failure
The most common reasons for payment failures are:
|Insufficient funds||The customer doesn't have enough funds in their account to cover the payment.|
|Instruction cancelled||The customer's Direct Debit Instruction (DDI) is inactive.|
|No instruction||The customer does not have a Direct Debit Instruction set up with you. In rare cases, this may be due to a small bank requiring additional time to set up a Direct Debit.|
|Account closed||Your customer's DDI has been cancelled as they've closed their bank account.|
In some cases a "catch-all" code may be used by the bank, rather than specifying the actual reason. These can usually be considered as "insufficient funds".
You can view a full list of failure reason codes for each scheme within our online guides. Here is our Bacs (UK) guide on failure codes as an example.
Being notified of a failure
In almost all cases, GoCardless receives payment failure reports from payers' banks one working day following the charge date. These will then be processed and the payment status will update accordingly.
In rare cases, the payer's bank sends us a payment failure report more than one business day after the charge date. Consequently, as it is not included in the expected failure report, the payment is marked as 'confirmed'.
Usually in these cases, the bank will inform GoCardless in the following working day's report (two working days after the charge date), however on very rare occasions this can take longer.
Once GoCardless receives notice of the failure, the payment status will be updated.
Within the SEPA (Eurozone) Direct Debit scheme, late failures are more commonly found to occur several business days following the payment charge date. As such, we recommend allowing a minimum of 7 business days following confirmation of a payment being successfully charged, before processing a refund of said payment to your customer.
Please note: If GoCardless doesn't receive a failure report by the time the payment is submitted within a payout, the funds will be sent. If GoCardless then subsequently receives the failure report, this will be added to the payment status timeline and you will be notified via email, or webhook if using our API.
The amount of that payment will also be marked as a negative balance on your merchant account to be deducted from your next payout prior to submission to balance out the funds. You will be able to see this in the Debits / Credits breakdown of the corresponding payout in your GoCardless dashboard.
You can find out more about negative balances here.
Viewing the reason for a failure
You are able to view the reason for a payment failure in the status timeline of the payment in your GoCardless dashboard.
If you've built an integration with our API, you will instead receive a webhook with the details of the payment and reason for failure.