Yes, an issuer can decline a recurring merchant-initiated transaction (MIT) if the first payment in the series was not properly authenticated. The very first transaction, initiated by the cardholder (CIT), must have been challenged, meaning the customer had to actively verify their identity (for example, with a password). A frictionless initial transaction, where authentication happens in the background without a direct customer challenge, is not enough to validate future recurring payments.
If recurring payments are being soft-declined, you should:
Check if the initial transaction was fully challenged.
If not, have the customer make a new, challenged payment to authorize future recurring transactions.