MC Merchant Advice Codes

Nobody likes it when a credit card gets declined. It’s embarrassing for the customer, disappointing for the merchant, and frustrating for both parties. Nevertheless, merchants have no choice but to honor the instructions of the authorization response they receive—overriding them is a surefire way to end up with a chargeback.

Mastercard is taking action to improve these unfortunate situations by introducing new Merchant Advice Codes that can help merchants and acquirers retry authorization requests and avoid declines the smart way. What are Mastercard’s new Merchant Advice Codes, and how can they make it easier to successfully retry declined transactions?

  1. What are Merchant Advice Codes?
  2. What Will Mastercard’s New Merchant Advice Codes Do?
  3. What Else Can Subscription Merchants Do to Retain Customers?
  4. Conclusion

For cardholders, the nightmare scenario for a declined transaction is when you’re at a checkout counter with a cart full of purchases and there are people waiting behind you in line and getting impatient.

For merchants, the scenario that’s less vivid, but far more common and aggravating, is getting a decline response when attempting to charge stored payment credentials for a recurring transaction.

Subscription merchants rely on recurring billing transactions to keep their revenue flowing and sustain their business, but when a scheduled transaction is declined, the cardholder isn’t always there to offer a new card on the spot or come up with an alternative payment method. All too often, a declined transaction means the end of the subscription for customers who take a billing-related lapse in service as their cue to cut ties and move on.

By introducing new Merchant Advice Codes, Mastercard is giving subscription merchants a powerful new tool for reducing churn and improving customer retention. While any card-not-present merchant can take advantage of the insights provided by these codes, subscription merchants are likely to derive the greatest benefits.

What are Merchant Advice Codes?

Whenever you want to charge a transaction to a credit card, the first thing to do is send an authorization request. The request will be received by the cardholder’s issuing bank, who will send back a response indicating whether the authorization is approved or declined.

When a decline response is sent, the response should include a code that provides additional details explaining the reason. It may be that the card is expired, has been reported lost or stolen, or that there are insufficient funds to cover the transaction.

What Will Mastercard’s New Merchant Advice Codes Do?

The new update to Mastercard’s processing rules will provide additional information about declines related to insufficient funds, giving merchants and acquirers better chances of successfully retrying declined transactions.

Officially known as Mastercard Core Release AN 6042: Mastercard Authorization Optimizer Service Enhancement for Select CNP (Card-Not-Present) Transactions, this update was released to address the fact that increasing rates of insufficient funds declines have been causing congestion on the Mastercard network and leading to declining approval rates.

In technical terms, what this update will be doing is sending new data values to the existing Merchant Advice Code field (DE48 SE84) that communicates information about credit card declines after a transaction attempt.

The purpose of this data is to provide acquiring banks with better guidance on the optimal timeframes for retrying a failed authorization request.

The process will look something like this:

  1. The acquirer sends an authorization request to the issuer through the Mastercard network.
  2. The issuer receives the request and sends back a “declined” response indicating insufficient funds.
  3. As the response goes through the Mastercard network, Mastercard will apply its own set of rules for determining the proper guidance for retrying the transaction.
  4. Mastercard will append data to the Merchant Advice Code field for the acquirer to refer to.
  5. Based on the guidance provided by the appended data, the acquirer can make a more informed decision about if and when to retry the authorization request.

The new data values for the Merchant Advice Code field will be able to offer various suggestions for the best possible timing of a retry attempt. Here are the codes and their interpretations:

Data Value Advised Action
Retry in the next hour
Retry after 24 hours
Retry after 2 days
Retry after 4 days
Retry after 6 days
Retry after 8 days
Retry after 10 days

By taking the action advised by Mastercard’s logic, merchants and acquirers will be more likely to receive an authorization approval.

To take advantage of these new advice codes, merchants and their acquirers must learn to recognize the new data values and their meanings and use them as the basis for their decisions about whether or not to retry declined transactions, and how to time those reattempts.

Issuers, for their part, have been advised by Mastercard to use the most accurate decline codes possible in order to ensure that acquirers receive correct guidance.

What Else Can Subscription Merchants Do to Retain Customers?

Mastercard’s new codes can be a last-ditch failsafe against customer churn, but there’s a lot merchants can do ahead of time to keep subscribers happy and ensure that their billing information is up-to-date and usable.

One of the simplest and most effective things you can do is send out reminders before recurring billings are charged—especially if you bill infrequently or irregularly. Send a quick message to your customer via their preferred contact method a few days in advance, letting them know that their card is about to get charged.

You can also look into account updater services, which are offered by some card networks. These services will automatically update expired payment card credentials without requiring the cardholder to take action.


Being a subscription-based merchant can be a great way to build up a consistent revenue stream, but it comes with a lot of challenges as well. Holding on to your subscribers is the biggest one.

No matter how good you are at giving your customers what they want and offering them excellent customer service, it can be really hard to retain a customer who suffers a service interruption due to billing issues.

Mastercard’s new Merchant Advice Codes have the potential to be a big help, empowering you to make smart and strategic decisions about when you can safely give a declined card a second try.

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