Does the £20 buffer apply to Direct Debits?


(Michael) #1

This week I had a MoneyBox DD declined due to lack of funds (I forgot to move money over)

The DD was for £9 and my balance was £5.62, how come the £20 buffer didn’t apply?


(Simon B) #2

I think you might be conflating a couple of things.

Do you have an active authorised overdraft? If not, it would fail.

If you do have one - the £20 buffer refers to the amount of overdraft you can have before we start charging the 50p a day fee.

There is a potential small buffer for presentments if you don’t have an authorised overdraft, but not direct debits.


(Oli) #3

Surely the £20 buffer is a nice feature to have, overdraft or not?


(Michael) #4

Ah, no I don’t. That explains why it failed.

Yeah, I wasn’t aware an overdraft was required, I thought it was just a buffer for everyone.


(Peter Roberts) #5

Would you want a credit check to get a £20 loan :stuck_out_tongue_closed_eyes: ?


(Oli) #6

Good point, well made :rofl:


(Frank) #7

I did ask this question some time back and the response was that all customers would have the £20 buffer regardless.

So are you saying if you have no overdraft you have no £20 buffer?


(Michael) #8

I thought the buffer was the same as the £10 ‘unauthorised overdraft’ buffer that many legacy banks offer.

Seems this is not the case and is only available to those with an overdraft as a ‘fee free’ limit.


(Peter Roberts) #9

It’s available only to those without an overdraft in the event that Monzo must approve a transaction in any case. E.g offline transactions or presentments without auths


(Dan) #10

I thought that too…


(Gareth) #11

This thread below implies that everyone has a £20 buffer, and doesn’t appear to stipulate limitations on that. The T&C’s are clearer - “You need enough money in your account to make payments.”


(Peter Roberts) #12

That particular post by Tom and the discussion before does seem to imply that :confounded:


(Simon B) #13

There are a few cases where your account might still go overdrawn without you expecting it — most notably with delayed transactions from organisations like TfL or bills from hotels that come in late that we can’t reject (because they’re presentments)

As per above - the buffer if you don’t have an overdraft is applicable to unauthorised overdrafts under that amount that occur due to delayed transactions or presentments that don’t match authorisations - hence the sentence regarding “without you expecting it”.

This therefore is not applicable to Direct Debits - you know when they’re coming, if you don’t have the money in your balance in the days leading up to the DD, we’ll notify you that you need to move some money into your balance to avoid the payment being rejected.


(Frank) #14

I think that post from Tom is the one I was referring to. It does say everyone would get it and didn’t state it was only for offline transactions.

Good to know this is incorrect and it is actually offline only. So those to actually benefit from the £20 as a fee free buffer are those with an overdraft.

Out of curiosity. What happens if an offline transaction is over £20? Does it still debit? Are you then charged 50p per day? Or can you not charge because there is no official overdraft in place?


(Alex Sherwood) #15

That would take you into your unplanned overdraft & then you’d be charged 50p per day -

There are a few cases where your account might still go overdrawn without you expecting it — most notably with delayed transactions from organisations like TfL or bills from hotels that come in late that we can’t reject (because they’re presentments — more detail here). Most of the time, these payments should fall within your £20 buffer, but if they don’t, we’ll notify you through the app and give you at least until midnight of that day to clear it. If you don’t clear it, we’ll just treat it like the normal overdraft and you’ll be charged 50p/day. This will also be reported to credit reference agencies. Long term, we’d like to make the whole process around these delayed transactions even easier and clearer!

Quote from this blog post.


(Frank) #16

Thanks for adding the info. :+1:t2:


(Michael) #17

When does this happen? I’ve never had one of these notifications. Is it yet another iOS only thing?


#18

Not at all.

If your balance can cover the DD at the time the file is run, no notification

If your balance is below the DD amount in the file when it is run, we’ll push a notification through

So if you’ve spent money in between the file running and the DD, no notification to warn you.


(Michael) #19

Hmm, my balance was £5.62 from Saturday morning, and didn’t change until after I noticed the direct debit failed on Monday, when would the file have been run?


#20

Friday :). Direct debits are processed on working days.