How will the machine indicate a rejected payment? Does it give the reason for rejection?

A rejected payment is indicated by the reader in exactly the same way as for Oyster, with a red LED and a warning beep.  The bus ticket machine also displays a message to customers which varies depending on the reason for the rejection.  The driver sees the reason for rejection, and has the option of printing out an advice slip to hand to the customer explaining the reason and/or directing them to the TfL website for more information.