Credit and debit same day - how are low balances handled?


(Alan M) #1

Hi!

I’m moving across to the Monzo current account and today I had my salary paid in and my rent standing order go out. Unfortunately the s/o was declined as it was processed first, so I had to make the payment manually.

Is this a known issue? (Apologies if it’s been discussed a thousand times already.)


(Hugh) #2

I’ve never had this issue: my standing orders have always gone out after salary has come in.


(Colin Robinson) #3

Have a chat in app with :monzo: to see what’s happened?


(Shaun McDonald) #4

Usually with faster payment standing orders banks try to send the payment again later in the day several time up to around 3pm. It’s why some banks say that any money to cover outgoing payments needs to be in the account by x time, with many being more flexible than previously.


(Andre Borie) #5

I would assume currently it’s undefined behaviour as to which one comes first - salary or SO. They are probably handled by different services and it’s down to luck as to which one gets processed first.


#6

Transactions relating to overnight processing usually apply credits (salary) before debits (Direct Debit).


#7

Those using recurring card payments (such as Payday lenders) will typically try to exploit the gap between credit and debit by hitting an account with multiple requests to get ahead of other who are requesting debits via DD.

Of course Faster Payments credit can in theory come in at any time, so if a payment was being made via that it could have become delayed in transmission from say an employer.

When l banked with Starling my salary would credit my account at 00:01 with NatWest it usually appeared between 01:00 - 02:30.


#8

I noticed the other day that one of my Direct Debits was debited from my account, before a Direct Credit (scheduled for the same day) was credited…

Should this happen? If funds had been very low, would the £18.50 DD bounce based on lack of funds?

I know some people run their accounts pretty lite just before payday :rofl:


(Simon Turp) #9

I’ve had a standing order process AFTER salary payment was deposited on my most recent pay day?

Not sure if it has changed, but I certainly think the incoming payments should be processed first.


#10

Doesn’t it depend on how employer transfer payment to employee bank account? I am guessing standing orders will process automatically at a certain time but salary payment will depend on employer’s processing system.


(Simon Turp) #11

That’s a fair point. If it is processed via BACS then it should go through before DD & SO are processed (gas for me before), however if you are paid by Faster Payments then that’s another ball game, as it then depends what time they process the payments.


#12

If overdrafts roll out with the CA, surely the account will just go overdrawn and then back into credit the same day and so there will be no charge?


(Jolin) #13

Though not everyone will want to take out an overdraft, so it would still be good for the credits to happen before the debits. Or at least for the debits to be re-tried at the end of the day if they initially fail.


(Nick) #14

Credits should always be shown before debits made on the same day.

Unless of course you make a bank transfer (debit) and then receive a bank transfer (credit) the same day; however if a salary payment (IN) is received the same day that a Direct Debit or Standing Order is made (OUT) then the IN should be shown before the OUT.


#15

It would be really disappointing if Monzo made a fuss about these payments, wouldn’t it?

I have accounts with Santander, TSB, Barclays and Natwest, and have run into this situation in each of them (it’s that month that I decided to get more organised :blush:), without having an overdraft agreement in place for any of them. For all of them I could simply transfer some money in by 3, 4, or 5pm (slightly different deadline for different banks) and they’d not charge overdraft fees, not report to referencing agencies, and not return the SO or DD. It’s as if the whole thing never happened.

I would hope that for all of Monzo’s feel-good, we-are-always-our-customer’s-friends, have-a-hug-emoji approach they’d at least not be worse than those dinosaur legacy banks. It’s a shame, though, that there is absolutely no information about this on their website. Contrast this with Barclays, Santander and TSB and it’s pretty prominent on all their websites.


(Tristan Thomas) #16

Good questions! I’ve just checked and we can choose when to debit and credit these sorts of payments — they currently happen at the same time (about 3am I think). It’s on our list to improve (so add credits before taking debits), but for now, we’d advise to try and avoid setting them up for exactly the same day :slight_smile:


3 x standing orders declined overnight
#17

Do you also process direct debits, credits or standing orders on weekends as well?

I don’t know if work paying me on the Friday instead of the weekend, if payday falls then, is my work being smart or the bank being smart or if you’ll be a different smart or if some third party controls the interbank batch processes.

(Edit) do you also process these transactions on bank holidays?


(Patrick) #18

My second wage was just paid in to Monzo. I had direct debits set up to go out on the day I get paid.

I’ve always done it like this with every bank ever (sometimes there’s no choice!) and never had a problem.

However, with Monzo, I just discovered that it declines them!
If you go in to the transaction details and look at the timing, they all state 0200 as the time my pay went in and the time the direct debits were rejected.

I understand other banks kind of pause the outgoing DDs till about 7am to get around this? Some DDs only let you select the 1st or 15th and not a custom date - so this is always going to be a potential problem. Normally I’d have a small overdraft just in case - but they’re not open to Android users yet :confused:

Luckily, they were only two charity payments - but this could have been a problem. Does it try again later in the day?


3 x standing orders declined overnight
(Brandon Billingham) #19

No, annoyingly Monzo don’t retry payments yet


(MikeF) #20

This has been discussed as something that may change in the future as they scale up but, for the moment, the recommendation is to set things up for the day after payday. It’s not impossible that an in-app chat will provoke a retry but that’s an obviously manual process that isn’t useable monthly or for 10s of thousands of people.