Going overdrawn


Do I get a prize for being able to take my Mondo account overdrawn? :slight_smile:

The tipping culture in the US makes it possible to go overdrawn on your card: You pay for a bill (meal, drinks, whatever) and your card is authorised for the total amount. You then write your tip on the receipt and at some future point the transaction is reprocessed with the total+tip amount.

To illustrate an example: Lets say you have £70 in Mondo balance, which equates to $100 at today’s (miserable) exchange rate. You get the bill for that nice meal and cocktails you had and it is $90, before tips. You hand the waiter your Mondo card, and he swipes and authorises the transaction. At this point your Mondo account is deducted $90 (equivalent in GBP). The waiter returns your card, along with the receipt for your signature, and any tip you wish to add to the bill.

Because you’re a nice person, and the service and food was good, you tip your waiter - lets say 15%, which is $13.50 on a $90 check. So you add $13.50 to the receipt and sign and leave, as is the norm in the US. At some point the establishment will reprocess all these receipts and add on the tips. In your Mondo account, the $90 transaction becomes a $103.50 transaction, and as it has already been authorised, this drops you into an overdrawn state.

It would be good to get a notification if you go overdrawn. I only noticed by accident.

(James Billingham) #2

Yep, there are a few cases where you can go overdrawn. See: Q&A: Card networks, payments, authorisations etc

It would be good for you to receive a collapsed notification when the presentment file is processed though, letting you know how many transactions happened, how much for, and your updated balance.

(Jolin) #3

Interesting, as @billinghamj notes, this is similar to the offline transaction issue in that it messes with Mondo’s feature of showing you your ‘true’ balance at any given time. I wonder if there is any way to more elegantly handle offline/reprocessing situations. Maybe not until Mondo build their own global card network!

(James Billingham) #4

That is precisely what I was discussing with Jonas at the end of that thread :slight_smile:

Unfortunately at present, it looks like there is no way for this to happen. It would be up to the card networks to make it happen.

It is exceedingly unlikely that Mondo will ever operate their own card network, sadly. This is primarily because it would require firmware updates (or even complete replacement) of every payment terminal on the planet.

(james.a.davison) #5

Because your a nice person? I don’t tip at all to anyone. My Mondo money definitely won’t be used to prop up a stealth business model. I wouldn’t like to be able to go overdrawn with Mondo, not in its current form anyway. Would defeat the purpose really. If anything I would love to be able to select ‘added optional tip’ and deduct that from the bill by only letting them take the amount minus those stealthy little ‘added optional tips’ :slight_smile:


I’d suggest revising that policy if you ever travel in the US. Tipping is part of the culture, and for many in the service industry it actually forms part of their remuneration. If you’ve had bad service, it’s okay to not tip - but in any other situation, you’re actually being a bit of a douche if you don’t.


Sorry for resurrecting an old thread, but maybe I can claim the prize from you for going overdrawn, as well as possibly spotting a potential bug with Monzo (or their card network). I’ve just come back from two and a half weeks in Australia and been using my Monzo card for almost all payments. One week in to the trip, something weird happened, whereby my car hire was refunded (~£500) almost exactly one week after paying for it. No idea why, didn’t really pay attention, ended up spending the money over the following week. Just before I fly back (another week later), the money comes out of my account sending me nearly £500 overdrawn. I raise a concern with Monzo who tell me it was an off-line transaction and urge me the pay back the money ASAP as it’s “not something they allow their customers to do…sooner rather than later”.

A few days later, lo and behold, more transactions are getting refunded (a further two, one from a petrol station and another from a hotel), again exactly a week after I made them. It’s now making using my “pre-pay” card really difficult as it’s hard to figure out exactly how much money I have and I’m fairly certain these will be reclaimed in the next week. Awaiting a response from Monzo support on this but watch out everyone!

(Matty Cusden-Ross) #8

Was it an un-manned, automated petrol pump?

(Simon B) #9

Hey Tim! Apologies that this happened to you. It’s fairly uncommon, and even when it does happen, it’s generally not in amounts as large as the one you’re seeing.

Essentially how it works : When you make a payment, this is the Authorisation. This ring-fences that amount of money but technically it is still in your account. Then merchant then has a few days to make the Settlement, which is when the money goes from your account to theirs. Merchants do this in bulk every few days, as it’s cheaper.

However - if they fail to process the Settlement in the usual amount of time… The authorisation that you made when you paid gets reversed, and the money will appear back on your balance. Obviously the merchant doesn’t want to be out of pocket when they know the customer has received the goods/service - so when they realise what’s happened, they have the option of forcing the payment through, and this is the Offline transaction that you were informed about. The other time that Offline transactions are usually seen is on transport, so for example if you buy a ticket on a train, or buy products on an airplane. Their POS terminals aren’t connected to the network when travelling, so they have to process them offline.

Unfortunately when travelling around a lot and making more transactions there’s a higher chance of this sort of thing happening, but generally, it’s very important to keep an eye on your balance and day-to-day transactions. If you see a refund come through that you’re unsure about, feel free to reach out to us on the in-app chat, any time of day or night. If you’ve indeed received the goods and services, it’s all but guaranteed that the merchant will force the funds through again if they failed to settle the first time - after all, you’d ensure you did the same if you were the merchant in question!

So whilst we know that it’s not the greatest user experience, as it stands right now there’s only so much we can do - since we can’t ensure that every merchant is reliable enough to settle in the given amount of time. Regarding making the repayment, we’re here to assist you with that if there’s any problem with it, and @StuartM can work with you on this.

I hope this makes things a little bit clearer as to what happened here, please let us know if you have any questions!

Refund from Bar

Nope. Even bought some road snacks. Also the rental company, Hertz, was definitely not unmanned, neither was the hotel for that matter.


That’s great, thanks for the explanation Simon. It’s just something I’ve never seen with my current account or credit card, so for it to happen 3 times was a bit of a shock! Maybe the Ozzie’s are just a bit slower in processing these things for some reason.

(Simon B) #12

What you may have seen with your current account or credit card is two separate balances : “Account Balance” and “Available Balance” - and you may have noticed that sometimes there is a discrepancy between the two! However, the problem with this is that the majority of people don’t understand it. It’s to account for Authorisations that have yet to settle. In order to provide real-time notifications and a real-time balance, we simply show you the Authorisations. However this does mean that if the Settlement doesn’t act in the usual manner, then situations like this can occur!

We’re keen to improve the experience here, and when we launch the Current accounts it’ll be much easier to do so :grinning: