Unbelievably high rate of "customer's card was declined" on subscription API

Question

We have an android app that is billed as a monthly recurrent subscription with a 7 days trial. The problem that I am seeing is that at the end of the trial, when the order is processed for billing, more than HALF of the attempts end up in failure due to payment declined. On google-wallet orders I see:

Aug 3 6:52 AM Payment declined The customer's card was declined. Google has sent an email instructing the customer to update their card. If they fail to provide a valid card in a timely manner, this order will be automatically cancelled by Google. Aug 3 6:52 AM Payment declined The authorization to the payment instrument the customer provided failed. The order has been automatically cancelled by Google. Aug 3 6:52 AM Pending You received a new order. Google has sent the customer an order confirmation email.

Does anyone have similar experience? how does the credit check and fraud control work? aren't these orders checked at the beginning of the trial? ~60% of failure seems unbelievably high for credit cards.

Answer 1

Google play is committing fraud by faulty transactions and will not listen to any complaints, so I assume there will be a class action lawsuit by developers one day to regain their losses. I had sudden cancellations within seconds of apps being purchased. One buyer was in the same building and told me he got my app for free because his purchase was credited back to him after he downloaded it and he never cancelled. I then tried to purchase my own app. Google play has a tech error and gives apps out for free. You just need to change a last digit or CVC code and you get the app for free because the payment is never cleared until AFTER you download the app.

Answer 2

A credit card transaction has two important parts: authorization and settlement.

I am not familiar with the APIs Google provide for payments but if they allow you to control these parts then you can do the authorization at the beginning of the trial period.

When the authorization stage is done the credit card company reserve this amount for you from the clients account but doesn't yet charge it.

After the trial period you can do the settlement and the client will be charged.

If you've already done the authorization then the settlement is much less likely to fail.

These two stages usually exist in order to give the business entity time to check for fraud. If a transaction is cancelled after authorization but before settlement there's little or no fee for the business entity. If the transaction is cancelled after settlement there be a substantial fee charged from the business entity (by the credit card company).