How is approval rate measured?
Approval rate is approved transactions divided by transactions submitted for authorization. The definition of the denominator changes the result. As an illustrative example: 10,000 customer payments generate 12,500 authorization attempts once cascades are included, and 7,600 payments end approved. Attempt-level approval rate is 7,600 ÷ 12,500, or 60.8%. Payment-level approval rate is 7,600 ÷ 10,000, or 76%. Both are correct, but they answer different questions and should not be compared with each other.
Why does approval rate matter?
Every declined payment is revenue the merchant already paid to acquire. Small changes add up quickly: one percentage point on 200,000 monthly payments is 2,000 more successful payments a month. For new customers the effect is larger, because a declined first purchase often means the customer never returns.
What lowers approval rate?
Common causes are issuer policies against certain merchant categories, cross-border processing, failed or abandoned 3-D Secure challenges, insufficient funds, incomplete data in the authorization request, and provider outages. Splitting approval rate by provider, card country, issuer, method and decline code shows which of these is driving the number, and which can be fixed by routing and which cannot.
Where does Omno use it?
Omno’s routing-decision log records every attempt and its response code per PSP, method, country and customer group, which is the data needed to calculate both approval rate views. Routing rules and cascading are the levers that act on it.