Reimagining Digital Payments: AI, False Declines, and Revenue Recovery

BizTechReports Executive Q&A with Spreedly and FlexFactor

In today’s digital commerce landscape, every transaction matters. Merchants spend heavily to attract and convert customers — yet many lose legitimate sales at the final stage because a payment is wrongly declined. These false declines frustrate customers, damage loyalty, and drain revenue. Historically, they were accepted as an unavoidable cost of doing business, a frustrating byproduct of risk controls and fraud prevention systems.

Recent advances in artificial intelligence, combined with payment orchestration platforms, are changing that narrative. Merchants can now recover a significant percentage of wrongly declined transactions in real time, improving top‑line performance without increasing marketing spend. In this BizTechReports Executive Q&A, Michael Rokos, Director of Strategy & Partnerships at Spreedly, and Rehman Baig, Chief Product Officer at FlexFactor, explore the strategic, operational, financial, and technological dimensions of intelligent decline recovery — and explain how these capabilities are reshaping the economics of digital payments.

The insights presented by Rokos and Baig are organized into four key segments: Strategic Assessment, Operational Imperatives, Financial and Economic Implications, and Technology Implementation.

Here is what they had to say:

STRATEGIC ASSESSMENT

BTR: Why is tackling false declines now a strategic imperative for digital commerce players?

Baig: The conversation used to be, “It’s unfortunate, but there’s nothing we can do.” Now, technology exists to change that. We can assess a transaction in under a second, decide whether it’s truly suspicious, and in many cases recover it before the customer even knows it was at risk of being declined. That ability shifts false decline recovery from a nice‑to‑have operational improvement to a strategic growth lever. When I explain to a CFO that we can unlock 3%–5% top‑line growth without touching their marketing budget, they see the value.

Rokos: From Spreedly’s perspective, it’s also about flexibility and control. Merchants no longer want to be tied to a single payment provider or locked into rigid fraud‑prevention settings. Payment orchestration gives them the ability to choose the right tools and services for their needs. By integrating with FlexFactor, they can add an intelligent recovery capability into that mix and make sure they are maximizing approval rates. That’s a competitive differentiator in any market.

BTR: How does this align with broader trends in the payments industry?

Rokos: The industry is moving away from one‑size‑fits‑all approaches toward highly configurable payment stacks. That includes the ability to route transactions differently depending on geography, customer type, or transaction value. Intelligent decline recovery fits naturally into that strategy because it allows merchants to optimize at the point where revenue is most at risk.

OPERATIONAL IMPERATIVES

BTR: What are the operational realities of dealing with false declines, and how do merchants typically address them without a solution like FlexFactor?

Rokos: In many organizations, the default approach is to retry a declined transaction, either immediately by cascading it to another payment processor, or later by re‑submitting it on a different day. For recurring or subscription businesses, they might set up automated retries at fixed intervals. While that can work in some cases, it’s not very precise. You might recover a few transactions, but you’re also adding latency, complexity, and cost to your operations.

Baig: And every false decline is a lost opportunity which can generate work. Marketing goes after that buyer with a re-targeting campaign. There's hidden costs which accrue in the background and negative impacts to your MID / processing infrastructure. Ultimately, in many cases, that customer is already gone. They’ve gone to a competitor or otherwise abandoned the purchase entirely. You’re left chasing after them, which is expensive and often unsuccessful.

BTR: How does your combined approach change that?
Baig: Our AI works in real time. When a transaction is declined, we instantly analyze it to determine if it’s likely to be legitimate. If we’re confident it is, we approve it on the spot and cover it on the merchant’s behalf. The consumer experience is seamless: they get their confirmation, and the merchant gets the sale. That’s a big operational win because it removes the downstream work of trying to fix a bad customer experience.

Rokos: From an orchestration standpoint, it’s also about easy activation. A merchant using Spreedly can turn on FlexFactor’s service with minimal integration. You’re not talking about a six‑month IT project. That speed of deployment is a big deal for operational teams that are already stretched thin.

FINANCIAL AND ECONOMIC IMPLICATIONS

BTR: What kind of financial impact can false decline recovery have at scale?

Baig: The losses are huge. Even a modest false decline rate can translate into millions in lost revenue for a large merchant. The math is simple: every declined transaction represents not just the lost sale, but also the sunk cost of acquiring that customer. In some sectors, false declines happen at a rate of 10%–15% domestically, and up to 40%–50% in cross‑border commerce. A significant share of those are recoverable. The beauty of what we do is that recovered revenue flows straight to the bottom line. There’s no extra marketing spend, no discounting, no new product development. It’s just money you were already positioned to earn.

Rokos: And there’s another layer: customer lifetime value. A customer who experiences a false decline might not come back. That’s a revenue hit today and in the future. If you can prevent that first bad experience, you increase the likelihood of repeat purchases, higher average order values, and longer retention.

BTR: How does this change financial planning for a merchant?

Baig: It gives them a new lever to pull. Most growth strategies rely on acquiring more customers or selling more to existing ones. False decline recovery is different — it’s about capturing value that’s already in your pipeline but is slipping away. When you quantify it, it often justifies investment in payment optimization as a strategic priority.

TECHNOLOGY IMPLEMENTATION

BTR: Let’s talk about the technology side. How do orchestration and AI work together here?

Rokos: Orchestration is about choice and agility. We provide a platform that connects merchants to over 150 payment gateways and related services. That means they can configure their payment stack in a way that suits their business model and market expansion goals. Adding a service like FlexFactor is straightforward. It plugs into that environment and starts delivering results almost immediately.

Baig: From the AI side, the key is speed and accuracy. We’re analyzing behavioral signals, transaction history, and contextual factors in milliseconds. Our system isn’t just about following rigid rules. We make inferences based on patterns that indicate whether a transaction is good or bad. That’s what allows us to approve legitimate transactions with confidence, even in challenging scenarios like cross‑border payments where decline rates are higher.

BTR: How important is compliance in deploying this kind of solution globally?

Rokos: Extremely important. Any service that interacts with payment authorization must meet stringent security and regulatory standards. Both Spreedly and FlexFactor are PCI Level 1 certified, and we maintain active relationships with card networks to ensure compliance. That gives merchants confidence that they can use these capabilities anywhere they operate.

Baig: Cross‑border is where integrating compliance and intelligence can really make a difference. Acquirers tend to be more conservative with international transactions, which means higher decline rates. But many of those transactions are legitimate. Our AI can identify and approve them without breaking the rules or taking on unacceptable risk. That’s a powerful enabler for merchants looking to expand globally.

BTR Bottom Line:

The economics of digital payments are changing. For years, merchants accepted false declines as a necessary evil — a trade‑off for fraud prevention and risk management. But AI‑driven recovery, combined with payment orchestration, has turned that equation on its head.

Spreedly and FlexFactor’s approach shows that merchants can recover a meaningful share of lost revenue in real time, improve customer satisfaction, and reduce operational friction without overhauling their technology stack. This isn’t just an incremental improvement; it’s a new way of thinking about payment optimization as a growth driver.

In a competitive global market, where acquisition costs are high and margins are tight, merchants who embrace intelligent decline recovery will have an advantage. They will keep more of the customers they’ve worked so hard to win, protect their brand reputation, and unlock revenue that was previously written off as lost. The winners in this space will be those who act early, adapt quickly, and make payment optimization a core part of their growth strategy.

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