diff --git a/backend/hct_mis_api/apps/payment/models.py b/backend/hct_mis_api/apps/payment/models.py
index 900b000798..dfe67acece 100644
--- a/backend/hct_mis_api/apps/payment/models.py
+++ b/backend/hct_mis_api/apps/payment/models.py
@@ -923,7 +923,11 @@ def is_reconciled(self) -> bool:
 
         return (
             self.eligible_payments.exclude(
-                status__in=[GenericPayment.STATUS_PENDING, GenericPayment.STATUS_SENT_TO_PG]
+                status__in=[
+                    GenericPayment.STATUS_PENDING,
+                    GenericPayment.STATUS_SENT_TO_PG,
+                    GenericPayment.STATUS_SENT_TO_FSP,
+                ]
             ).count()
             == self.eligible_payments.count()
         )
diff --git a/backend/hct_mis_api/apps/payment/services/payment_gateway.py b/backend/hct_mis_api/apps/payment/services/payment_gateway.py
index 46d2724ee2..51fe47859b 100644
--- a/backend/hct_mis_api/apps/payment/services/payment_gateway.py
+++ b/backend/hct_mis_api/apps/payment/services/payment_gateway.py
@@ -163,9 +163,8 @@ def get_transferred_status_based_on_delivery_amount() -> str:
                     self.payout_amount, entitlement_quantity
                 )
             except Exception:
-                raise PaymentGatewayAPI.PaymentGatewayAPIException(
-                    f"Invalid delivered_quantity {self.payout_amount} for Payment {self.remote_id}"
-                )
+                logger.error(f"Invalid delivered_quantity {self.payout_amount} for Payment {self.remote_id}")
+                _hope_status = Payment.STATUS_ERROR
             return _hope_status
 
         mapping = {
@@ -180,7 +179,8 @@ def get_transferred_status_based_on_delivery_amount() -> str:
 
         hope_status = mapping.get(self.status)
         if not hope_status:
-            raise PaymentGatewayAPI.PaymentGatewayAPIException(f"Invalid Payment status: {self.status}")
+            logger.error(f"Invalid Payment status: {self.status}")
+            hope_status = Payment.STATUS_ERROR
 
         return hope_status() if callable(hope_status) else hope_status
 
@@ -435,8 +435,16 @@ def update_payment(
             _payment.fsp_auth_code = matching_pg_payment.auth_code
             update_fields = ["status", "status_date", "fsp_auth_code"]
 
-            if _payment.status not in Payment.ALLOW_CREATE_VERIFICATION and matching_pg_payment.message:
-                _payment.reason_for_unsuccessful_payment = matching_pg_payment.message
+            if _payment.status in [
+                Payment.STATUS_ERROR,
+                Payment.STATUS_MANUALLY_CANCELLED,
+            ]:
+                if matching_pg_payment.message:
+                    _payment.reason_for_unsuccessful_payment = matching_pg_payment.message
+                elif matching_pg_payment.payout_amount:
+                    _payment.reason_for_unsuccessful_payment = f"Delivered amount: {matching_pg_payment.payout_amount}"
+                else:
+                    _payment.reason_for_unsuccessful_payment = "Unknown error"
                 update_fields.append("reason_for_unsuccessful_payment")
 
             delivered_quantity = matching_pg_payment.payout_amount
diff --git a/backend/hct_mis_api/apps/payment/tests/test_payment_gateway_service.py b/backend/hct_mis_api/apps/payment/tests/test_payment_gateway_service.py
index 6f80290eea..9460666c7b 100644
--- a/backend/hct_mis_api/apps/payment/tests/test_payment_gateway_service.py
+++ b/backend/hct_mis_api/apps/payment/tests/test_payment_gateway_service.py
@@ -33,7 +33,6 @@
 )
 from hct_mis_api.apps.payment.services.payment_gateway import (
     AddRecordsResponseData,
-    PaymentGatewayAPI,
     PaymentGatewayService,
     PaymentInstructionStatus,
     PaymentRecordData,
@@ -259,14 +258,12 @@ def test_get_hope_status(self) -> None:
         self.assertEqual(p.get_hope_status(self.payments[0].entitlement_quantity), Payment.STATUS_DISTRIBUTION_SUCCESS)
         self.assertEqual(p.get_hope_status(Decimal(1000000.00)), Payment.STATUS_DISTRIBUTION_PARTIAL)
 
-        with self.assertRaisesMessage(PaymentGatewayAPI.PaymentGatewayAPIException, "Invalid delivered_quantity"):
-            p.payout_amount = None  # type: ignore
-            p.get_hope_status(Decimal(1000000.00))
+        p.payout_amount = None  # type: ignore
+        self.assertEqual(p.get_hope_status(Decimal(1000000.00)), Payment.STATUS_ERROR)
 
-        with self.assertRaisesMessage(PaymentGatewayAPI.PaymentGatewayAPIException, "Invalid Payment status"):
-            p.payout_amount = float(self.payments[0].entitlement_quantity)
-            p.status = "NOT EXISTING STATUS"
-            p.get_hope_status(Decimal(1000000.00))
+        p.payout_amount = float(self.payments[0].entitlement_quantity)
+        p.status = "NOT EXISTING STATUS"
+        self.assertEqual(p.get_hope_status(Decimal(1000000.00)), Payment.STATUS_ERROR)
 
     @mock.patch(
         "hct_mis_api.apps.payment.services.payment_gateway.PaymentGatewayAPI.add_records_to_payment_instruction"