Payment Success Rate Explained: Why It Matters and How to Increase It

Key Takeaways:

• With 260M+ online shoppers in India (2025) and e-commerce growing at 27%, brands cannot afford to lose customers to payment failures.
• A low payment success rate increases CAC, reduces revenue, and damages customer trust.
• Factors like gateway performance, bank uptime, UPI load, network issues, and poor checkout design directly impact your transaction success rate.
• Brands can improve success rates by choosing better gateways, offering multiple payment methods (including EMI on UPI), reducing redirects, optimizing mobile checkout, and displaying clear error messages.
• Snapmint helps increase payment transaction rate by offering smooth EMI on UPI, leading to 30%+ higher checkout conversions and a seamless payment experience.

Introduction:

Payment success rate has become one of the most critical metrics in the digital payments world, especially at a time when Indian e-commerce is exploding. According to IBEF, India is expected to have over 260 million online shoppers in 2025, and the industry is growing at a remarkable 27% annually. (1)

With new online brands appearing almost every month, businesses simply can’t afford to lose customers because their payments fail. Payment failures are still one of the biggest reasons shoppers drop off.

Every failed transaction increases CAC, weakens customer loyalty, and dents overall revenue. In such a competitive market, getting your payment success rate right isn’t just good for business; it’s essential for growth.

What is the ‘Payment Success Rate’?

Payment Success Rate is a key metric that shows what percentage of total payment attempts were successfully completed.

In simple terms, it tells you how many customers were able to complete their transaction or pay without their transaction failing.

Now, you might think - how does the transaction success rate affect any brand?

A high payment success rate = smoother checkout + happier customers.

A low payment success rate = revenue loss + abandoned carts.

This metric is especially important for D2C brands, e-commerce stores, apps, subscription services, and any platform using online payments.

How to calculate payment success rate?

Calculating payment success rate is fairly simple.

Use this formula: Payment Success Rate = (Number of Successful Payments ÷ Total Payment Attempts) × 100

Where:

• Successful payments = transactions that went through successfully
• Total attempts = successful + failed + declined payments

Let’s explain that with an example:

If your app had:

• 900 successful payments
• 1,000 total payment attempts

Then:

Payment Success Rate = (900 ÷ 1000) × 100 = 90%

This means 90% of customers who tried to pay were successful.

What Counts as a Successful Payment?

A payment is usually considered successful when:

• The transaction is authorized by the bank
• Payment gateway confirms success
• Amount is captured or settled
• Customer receives confirmation

Factors Affecting Transaction Success Rate

As per a survey, failed transaction was the most common problem faced by respondents, according to Statista. (2)

But why do transactions fail? Is it a reflection of something being wrong with your brand’s website? Let’s find out:

1. Payment Method Performance

Different payment modes have different inherent success rates.

• UPI: Usually high payment success rate, but it can vary depending on PSP (Payment Service Provider) load
• Credit/Debit Cards: May fail due to OTP issues, authentication errors
• Net Banking: Often has lower success due to bank downtime
• Wallets: Typically stable and high success rate

2. Bank Server Availability

Transactions often fail due to bank downtime, server overload during peak hours, or sometimes maintenance windows.

Even if your payment gateway works fine, a bank’s poor performance can reduce TSR, and honestly, there isn’t much you can do about it.

3. User Network Connectivity

Customer-side issues also matter:

• Poor mobile data or Wi-Fi
• Switching between apps during OTP entry
• Payment session timeouts

This is especially common in mobile-heavy markets.

4. Payment Gateway Reliability

A gateway’s internal system performance has a huge impact on the payment success rate.
Latency and response time, routing capability of the gateway, server capacity during traffic spikes, etc., often impact your transaction success rate or TSR.

5. Payment Page Design

Sometimes, your payment page can also be the problem. If you have too many fields, poor UI or confusing steps, this can create friction at checkout, which significantly impacts success.

Slow-loading pages and a lack of autofill for card details can also reduce your payment success rate.

A smoother flow = higher completion rate.

How to Improve Payment Success Rate for E-commerce Businesses?

Before we get to the various methods to improve your payment success rate, first ask a question: Why is Payment Success Rate Important? As a product manager, e-commerce head, or D2C founder, you might wonder why D2C brands care so much about payment success rate.

Why Payment Success Rate Matters?

In simple words, the payment success rate tells you how many customers were able to pay without any issues.

If your payment transaction rate is low, it means many people tried to pay but couldn’t complete the payment. That directly affects your sales and customer trust.

A smooth payment experience ensures more customers can finish their purchase without frustration, and they might come back again.

It also helps reduce cart abandonment. Most shoppers do not retry a payment more than once; if it fails, they drop the idea of buying or switch to a competitor. When your payment success rate is high, fewer customers abandon their carts, and you retain more revenue.

How to Increase Transaction Success Rate:

1. Choose a High-Performance Payment Gateway

It has been noticed that poor-performing gateways can reduce success rates by 10–25% during peak hours. High-uptime gateways typically maintain 90–95% UPI success rates.

A reliable gateway ensures minimal technical failures.

What to do:

• Evaluate gateway uptime
• Check the success rate by payment method
• Compare performance across banks

Choose the best-performing payment gateway for your brand.

2. Provide Multiple Payment Methods

Having multiple payment options during checkout reduces your chances of cart abandonment. When one method fails, customers can instantly switch to another.

UPI is a must-have payment method, owing to its growing adoption across the country. In 2025, India will have nearly 500 million UPI users. Adding UPI alone increases checkout success by 20–30% for mobile-heavy markets.

Having EMI on UPI will also give you a competitive edge, as there are more UPI users than credit card users in tier ⅔ cities. 

Have multiple payment options like UPI, wallets, net banking, EMI options, pay later, credit cards, etc., to ensure your customer doesn’t abandon checkout due to the absence of their preferred payment method.

Support customer fallback without restarting the checkout.

3. Optimize Mobile Checkout

70%+ of e-commerce transactions come from mobile users. So, if your website is not optimised for mobile, it can have a significant impact on your payment success rate.

Most failures happen on mobile due to slow loading or redirects.

What to do:

• Keep checkout under 3-4 steps
• Use auto-fill for OTP, card details, and address
• Avoid heavy scripts
• Keep checking and optimising

4. Reduce OTP & Authentication Failures

Incorrect or delayed OTPs are one of the biggest reasons for card payment failures.

What to do:

• Offer a quick "Resend OTP" option
• Keep OTP page simple and distraction-free
• Allow SMS + email OTP (if enabled)

5. Display Clear Error Messages with Smart Retry

More than 30% of users do not retry if they see a generic “Something went wrong” message.
So, you need to be clearer. A clear message helps users retry successfully instead of dropping off.

What to do:

• Show specific error reasons
• Auto-retry failed UPI/card payments
• Suggest alternate payment methods when needed

6. Reduce Redirections in Checkout Flow

As a project manager, if you are searching, how can I improve payment success rate for my brand, this is a simple yet effective step you can take.

Each redirect creates a risk of timeout or app switching issues. Avoid unnecessary external payment pages.

7. Improve Page Speed and Stability

Slow pages cause timeouts and user drop-offs.

You can compress images, reduce scripts, use CDNs, and other lazy-load non-essential elements to improve page speed. 

How Snapmint Improves Your Payment Transaction Rate?

Snapmint is India’s leading 0% EMI payment option. It is a growth partner for brands, helping them offer no-cost and low-cost EMI and pay-later options to their customers.

Snapmint improves your payment transaction rate by giving customers a smoother, faster, and more reliable way to complete their purchase using EMI on UPI. Because it doesn’t rely on long card authentication steps or bank redirects, payments go through more easily, resulting in fewer failures and higher completion rates. This simplifies the checkout experience and reduces the chances of customers dropping off during payment.

By offering an easy EMI option with UPI, Snapmint also increases the likelihood that customers will go ahead with their order, especially for slightly higher-priced items. In fact, brands using Snapmint often see a 30%+ increase in successful checkouts because customers get affordability and smooth payments in one click.

There are several other proven benefits of integrating Snapmint for your business. It increases add-to-cart by 30%, average order value (AOV) by 40%, and reduces RTO in e-commerce.

1. https://www.ibef.org/industry/ecommerce-presentation
2. https://www.statista.com/statistics/1413078/india-problems-faced-in-using-digital-payment/

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