Holiday Season Payment Failures: Why They Spike and How to Prevent Them

Why your online payment failed: Peak-season failure patterns

Payment failures are not limited to declined cards and can include timeouts, abandoned checkouts, soft declines and bank processing delays. There are multiple possible issues blocking funds from reaching your account. Here are the main ones:

System overload

Christmas is a period of giving, so expect a high volume of transactions (especially after Black Friday). But now, with viral social media posts, your business can sometimes see sales blow up at any time of year. This influx of buyers can overwhelm payment gateway systems and sites, leading to timeouts, slow processing, or even crashes.

System overload occurs when payment gateways or bank systems cannot process transactions fast enough during traffic spikes.

Legacy infrastructure can also cause bottlenecks in the process. Rigid central bank systems from decades ago can't handle real-time peaks, and siloed banks lack API integration, which can hinder smooth scaling.

Tips on how to improve this

• Get ahead of potential errors by using trusted partners like Netcash’s Payment Gateway
• Monitor your system performance to ensure it stays up to date and able to handle a surge in sales when the time comes.

3D Secure timeouts and One-Time PIN (OTP) issues

According to 2024 SABRIC stats, digital banking fraud remains a major problem, with over 65% of reported incidents. These figures are only increasing as AI tools become more widespread. That is why security protocols like 3D Secure and OTPs are so important. Holiday periods typically see a higher volume of attempted fraud and false-positive declines across South African banks.

With this, customers have between a few seconds and several minutes to approve or decline payments. But, sometimes this system works a little too well and times them out too fast, resulting in payment failures.

Tips on how to improve this

• Make sure you are providing clear communication to your customers about the 3D Secure process.
• Optimise your systems for mobile so they work fluidly across all devices.
• Work alongside payment providers to maintain support and offer insights during the process.

Limited bank windows

Many banks do not process payments over weekends and public holidays. And, unfortunately, South Africa has three public holidays in one month, which could cause payment delays or failures. This mainly affects EFT and inter-bank payments, which may only settle on the next working day.

Typically, payments to the same bank provider are processed the same day, but transfers to another bank require a little patience and can take up to 3 business days to reflect.

Tips on how to improve this

• Ask customers to provide proof of payment as soon as they make a purchase to avoid further delays.
• Communicate to customers about possible delays or bank cut-off times that may affect payment delays.

Fraud attempts

Sometimes payments fail because of suspicious activity. BNPL fraud is becoming a growing issue for businesses, with estimates reaching $4.95 billion in 2025. But that’s not the only way people are trying to commit fraud.

That is why businesses should stay informed about payment fraud trends and how to protect their assets.

Tips on how to improve this

• The best way to prevent fraud attempts is to improve your site's security, from strong passwords to multi-factor authentication (MFA) for your employees and customers.
• Use tokenisation to replace sensitive data with a unique, unexploitable token.

Cart abandonment

We’ve done the math and seen that cart abandonment rates reach up to 75% in South Africa. During one of the most profitable times of the year, that could translate to a loss of millions of rands for your business.

There are several reasons for this, including high shipping costs, a poor user experience, and a lack of preferred payment methods.

Tips on how to improve this

• Find out where the blockage is in your customer journey and why. Typically, the most common pain points are inconvenient payment methods and slow delivery.
• Offer live chat support through AI bots or a team of people to answer any concerns or questions customers may have about making purchases.
• Use retargeting ads for the products in your customers’ carts on other websites to serve as a reminder.

Customer-driven errors and soft declines

Sometimes payment errors are not due to system failures but to customer errors. Things like insufficient funds, outdated cards, or accidentally entering incorrect data when making payments are all it takes. Luckily, these are easy and fast fixes. A soft decline is a temporary rejection that can often be resolved by retrying the payment or contacting the bank.

Sometimes, banks may also issue a soft decline if a customer has reached their daily spending limit or if the payments are suspected of being fraudulent. In this case, the client would need to contact their bank to resolve the payment failure.

Tips on how to improve this

• Implement real-time validation on the payment page to highlight which fields contain incorrect details (e.g., an incorrect name, too few digits in the bank account number field, etc.).
• Send a reminder that you will hold their cart and that they can resume payment once the issue with their bank is resolved.
• Offer alternative payment methods and easy access to them if the primary card fails, so you don't lose the sale.