AI-Driven Payment Decline Recovery System for E-commerce Platforms

Many merchants face challenges understanding why card payments are declined, leading to lost sales opportunities. Their existing payment gateways provide limited information and lack tools for redesigning or recovering declined transactions, resulting in revenue leakage. The client seeks a solution that can analyze declined payments, identify valid transactions, and recover funds seamlessly without additional marketing costs.

A mid-sized online marketplace seeking to reduce lost sales due to declined payments by implementing an intelligent, automated recovery platform integrated with existing payment gateways.

• Develop an intelligent system that analyzes declined payment transactions to discern between valid and invalid declines.
• Implement automated payment recovery strategies to reattempt transactions with minimal manual intervention.
• Integrate the system with existing payment gateways and eCommerce platforms via APIs for seamless operation.
• Achieve a reduction in lost sales due to payment declines by approximately 5% and increase overall merchant revenue.
• Design the system architecture to support scalability, onboarding multiple merchants efficiently.

• Transaction analysis service to interpret declined payment data from multiple payment providers.
• Decision engine leveraging machine learning models to determine transaction validity and recovery actions.
• APIs for integration with various payment gateways (e.g., Stripe, Braintree) and eCommerce systems (e.g., Shopify).
• Webhook handling for real-time transaction updates and status notifications.
• Third-party API proxy service to validate data and interface with external fraud and security utilities.
• Automated retries and alternative payment strategies to improve transaction success rates.
• Dashboard or notification system to alert merchants about transaction statuses and recovery actions.

• Payment gateways (Stripe, Braintree) for transaction processing and webhook reception.
• eCommerce platforms such as Shopify for transaction data exchange.
• Fraud detection and security utilities (e.g., Sift, IPQS, Neutrino) via proxy services.
• Internal analytics or dashboard systems for monitoring system performance and transaction status.

• System scalability to support onboarding of numerous merchants with thousands of transactions daily.
• Real-time processing and response time within a few seconds to ensure timely recovery actions.
• High availability and fault tolerance to minimize downtime.
• Data validation and request logging for audit and security purposes.
• Compliance with financial data security standards (e.g., PCI DSS).

The implementation of the AI-driven payment decline recovery system is expected to recover approximately 10,000 transactions daily, with merchants realizing a ~5% increase in top-line revenue. The platform will eliminate marketing costs associated with transaction recovery, thereby improving overall profitability and operational efficiency, with scalable architecture ready for onboarding additional merchants.