Over the past couple of months I’ve noticed something happen at a couple of merchants in particular- JR East in Japan and Safeway in Canada. I’m charged the first time, then the first charge grays out and a second charge appears, but they both count against my available balance (oh, and the second posted charge doesn’t have the option to split bills nor does it show the merchant logo). Going by the “help” section it seems like this happens to some UK customers too, but theirs seems to be resolved and this… isn’t. Is this something that others have experienced too?
That is because it is pending.
They have charged you once (pending) i.e. to check you can pay.
Then later they have sent through the ‘real’ charge
The pending charge will disappear about a week later.
You can click on it and scroll to the bottom - one will say pending on i.e. why you can’t split it
That would have been understandable if the other charge disappeared within a week or two, and if the charge that can’t be split was the pending one. But it’s been over a month in this case, and it’s the posted charge that can’t be split.
Have you reached out to Monzo in app?
I have now and it’s been taken off now, I was trying to see how many other US users were having this issue and if this is something that always happens with these particular merchants (as in, I’ll always have to have someone on the support team help me with this when I make a purchase there).
The issue is with how the merchant does it, it would be the same with any bank.
It is just that Monzo show them instantly where as other banks have a pending balance.
Well, it’s more that other banks are able to match the posted transaction to the original authorization regardless of how the store sends it and not record it as a second item posted to my account.
That’s because most banks don’t have instant notifications
We have no visibility with other banks so who knows what they do?
I would be surprised if there is any matching going on. More likely the display balance is changing only for the cleared transaction but the available cash balance is going down for both the cleared and pending transaction, and bumping up again when the pending transaction clears.
Certainly that’s how it would work with my old bank accounts, and I’d be surprised if anything different was happening here.
Here’s how transactions at the same affected merchants show up when using any of the vast majority of my other US/Canadian cards:
Day 0: Transaction is authorized, the amount is taken out of my “available/spendable balance” (debit) or “available credit” (credit). On a debit card+bank account, the “current balance” remains the same, and the transaction itself shows up as “pending”.
Day 3-5: Transaction posts to my account. On debit card+bank account, “current balance” drops to match “available/spendable balance”. On both debit and credit, the original transaction is posted and shows in the list of transactions on the date the authorization happened.
Usually, posting the settled transaction to the authorized transaction, or posting then removing the authorization, happens the same day, at the same moment. From my perspective, I only see that the balance goes down and the authorization that happened a few days ago changes from “pending” to “posted/settled”. It doesn’t go down and back up, I don’t see a change in merchant name.
Also, that still leaves part 2 of the issue:
It’s actually the other way around. The pending transaction has the fancy stuff, including the option to split the bill:
The posted transaction doesn’t.
I’m not trying to be a difficult customer, but at the same time I do want to see this issue fixed in some way.
Yeah, this definitely sounds like it’s not working right, and I would be trying to get it fixed too. I can’t give any insight as to those merchants or why it’s happening unfortunately. I know you said support has solved the specific issue this time, but did you follow up and ask them to look into why it happened? That would be the best way to get to the bottom of this.
It might take a bit of back and forth, but hopefully they can escalate it to someone who can figure out what’s going on. Getting these kinds of issues sorted is surely part of the reason for this phase of the US accounts, and it will make the whole product stronger. I would hope that Monzo is appreciative of customers like you who are willing to put the time in to dig into the areas that aren’t working right.
Thanks for this post, I appreciate you offering a litle more understanding of what is going wrong, and @jzw95’s reply pretty much says all I would say. I’ll just add that you’re absolutely not being a difficult customer in this case, and Monzo no doubt actively want customers like you in the US to help them identify and iron out issues like these
I’m not a US customer (hello from the U.K.) and only have limited knowledge of how card processing works, but it does seem like an issue where the card authorisations (initially put through at the time of purchase to check that your card is valid and you have funds available to cover the purchase) are not being properly matched to the presentment (which is when the full charge is processed and the amount of the transaction final).
Normally, when the authorisation is sent, this results in a reduction in your available balance only. Later, at presentment, the full charge is processed and taken off your cleared balance. Monzo makes no distinction between the two - so you see the authorisation charge which you wouldn’t normally. But this is supposed to be a process where a presentment is “matched” to an existing authorisation (except in special circumstances which involve offline transaction processing where there was no authorisation beforehand). If things work properly in this way, the “real time balance” of Monzo showing authorisations as well is not a problem and is actually more accurate than most banks, and more representative of what is happening.
An authorisation normally “drops off” an account if no presentment is processed to claim the funds - in the U.K. this period is normally 7 days, but it can vary by country so it could be 30 days in the US?
What appears to be happening, is that the certain merchants are processing payments in a non-standard way which is causing this issue. It seems like they assume that the authorisation charge will automatically drop off, but they never send a message to reverse it, and the presentment is then coming through with a different ID - so it is not matched to the original authorisation and you are therefore charged again, with both charges showing in your account.
Perhaps most banks automatically reverse unclaimed authorisations after a certain period of time and Monzo doesn’t? If so, this would explain the behaviour, as the lack of visibility you get with most banks would mean you wouldn’t even know about the authorisation, only the presentment, and if the authorisation did automatically drop off or get reversed after some time, this would mean you would never see it on your statement.
So it seems to me that this is an issue caused by how certain merchants process their transactions (i.e. in a non-standard way) but Monzo could mitigate against it by auto-reversing unclaimed authorisations after 30 days and this is what they should do?
However, you are always more likely to run into these sort of issues in the US than you are here in the U.K. as your merchants often process transactions differently - unlike here where almost everything is an online (meaning real-time authorisation) transaction authorised immediately and appearing in the app immediately.
Thanks for the insight! This has definitely helped me better understand what goes on behind the scenes. I’d actually also recently received a message from Monzo support indicating there was an issue on their end that should be resolved now.
30 days has been the official rule for my other US issued cards (the point at which the card issuer will start an internal investigation into possible problems preventing an unclaimed authorization from releasing), at least the very few where I’ve had to deal with authorizations coming off (usually credit cards that I use for hotel or car rental bookings). Most cases they do come off in 7 days here too, but some take 14, and a combination of a particularly recalcitrant card issuer and merchant (in my case Citi + Holiday Inn a couple years ago) can lead to waiting the full 30 days.
The thing is, here in the US, lack of visibility on that front hasn’t been the case for as long as I’ve had bank accounts and debit cards (2008 or so). The vast majority of banks will show line items (merchant name, date, sometimes location) for authorizations. Some people even catch fraud that way and end up frustrated because their bank won’t let them dispute a fraudulent authorization, only a posted fraudulent transaction, so they have to wait for presentment to officially start a dispute. Hiding the authorization and only showing the final presentment is a behavior I’ve only seen in my Chinese credit card and for a time, my Canadian AMEX (they finally started showing authorizations sometime last year).
I’m hoping the recent support message they sent means they’re starting to do this. Monzo shouldn’t have to compensate for merchants not quite doing things right, but in this particular case it seems that it’s something that other banks in the US ended up adapting to (being able to “match” presentment to authorization despite different IDs), so the expectation has already been set that banks should work around this.
Thanks for the compliment! You are very welcome to my thoughts, but I would add again that I’m not a card expert so my post is basically just a guess (and sorry for not knowing some of the details around US differences in procedure, but I found it really interesting to read about that in your post).
Another thought that has occurred to me just now is that Monzo’s use of a partner bank in the US makes all of this a bit more complicated since there is an extra link in the chain along the way every time a transaction is processed. This is a complexity we don’t have on Monzo U.K. accounts to the same extent (although I think some third parties are still involved in certain aspects of operation, Monzo itself is an independently licensed bank in the U.K.).
It could have been as simple as a bug in the way messages were forwarded and translated from Sutton to Monzo which may have only affected some merchants based on their exact messaging format or something like that? This could easily have then led to the mismatch between authorisation and presentment occurring - which Monzo may not have caught in early testing if it only affected a small number of merchants. This sort of thing is why they have the beta period, right?!
It sounds like the US 30 days is a bit like our 7 days - usually it will be sooner, but 7 days is effectively the maximum except for particular merchants (like a hotel or car hire company which would be allowed to hold a deposit for as long as you had the room/car, even if longer than 7 days). So normally it would be strange for something to take the full 30 days?
As to your point about other banks, it may also be that this has been industry standard behaviour in the US for a while, but Monzo initially implemented things the same way they do in the U.K. where authorisations are not auto-reversed, so this could also explain why you see duplicate charges with Monzo but it doesn’t seem to happen for other cards. I suspect this is the case. This sort of thing is really what I was getting at when I said that there are more oddities in the US system. We don’t allow things like tip adjustment, so the card payments system is simpler in the U.K. - 99% of the time, an authorised amount is the same as the final presentment, with one of the only exceptions being pay at pump petrol stations and even this is supposed to be changing to a new system of “partial authorisation”. This is where the pump will ask to authorise £99 (for a maximum fill) and if you have less in your account, Monzo (or any bank) would reply with a “partial authorisation” of “you can only have (say) £63” - the current balance - and it is then possible to fill up with up to this amount. The authorisation is then immediately followed with presentment after you have completed filling up.
I must also admit to total ignorance about the authorisation visibility situation in the US - until recently, all of our “traditional” banks here in the U.K. simply had two balances, an “available” balance and a cleared balance. Historically, there was never any information available about what transactions were included in the available balance - only the cleared transactions would show. This is slowly changing here, and is being led by fintechs, but I unfairly assumed that because the US is behind us on most things banking (like how we had Chip and PIN in 2003 and you have only recently adopted the inferior “Chip and Dip”) the situation there would be at least as bad, if not worse. That was an unfair assumption and I’m sorry about that!
Sorry I haven’t quoted the relevant parts of your reply, but I’m replying on my phone so it’s a little bit tricky to do - I hope you don’t mind! Also, I didn’t realise that my post was getting so long - I hope it is interesting information, at least.
I’m of the opinion, at this point, that there’s definitely a bug in the system, although I’m still not entirely sure where it originates from. In the interest of figuring it out, I’m going to take the chance to head out with my Robinhood debit card and try again at that particular store. It’s also a prepaid card issued by Sutton Bank so at least from my perspective, same merchant, same acquirer, and same issuer would narrow it down Sutton Bank’s link to the fintechs they issue cards for (if the same issue happens with my Robinhood card) or something that Monzo needs to sort out (if it doesn’t happen with the Robinhood card).
And yes, it would normally raise eyebrows for something to take the full 30 days to refund. That particular combination was the only time I’d seen it take so long.
I’m actually a bit clueless about authorizations at the pump, because the few times I’d driven someplace (I don’t own a car, so when I drive, it’s usually a friend’s car or a car hire), I’d always gone inside to pay because I’d read enough stories of cards being skimmed (the US still doesn’t yet require chip card readers for pay at the pump).
And yeah, understandable on that front. The US is behind on so many things banking-wise it’s something of a surprise to find out that there are some things they’re ahead of the curve on.
Also, unfortunately, the issue from the beginning has only been partially solved; the refund of the initial authorization comes within days instead of having to manually bother Monzo support about it, but the problem is that the final presentment is still shown separately and without enhanced data. I’ll have to message support about it and see what progress can be made on this issue.
Yes, I completely agree with you that there must be a bug somewhere (it’s just that the question of finding out exactly where, and exactly how the bug is occurring, is difficult -especially since it only seems to be at certain retailers). It will be interesting what you find out with your Robinhood debit card experiment! Please post back with your findings.
I believe that magstripe-only pumps should become a thing of the past soon, as the liability shift for pumps occurs in October (so all of them should be upgraded by then, and for ones that aren’t individual merchants, i.e. petrol stations, will have all disputed magstripe transactions decided automatically in favour of the cardholder after that - the shift in liability will mean that disputes are invalidated from their side by the fact that they are still using magstripe; so if something ever did happen to your card it would be easier than ever to get all your money back.
Also, on your point about the enhanced data, that is why I think that it is a mismatch in the authorisation charge and the presentment - because otherwise you would get the data. The fact the final charge comes through with the unenriched transaction data seems like it might have been just the presentment - and the authorisation would have included all of the data, so if it matched it would have shown correctly. This might have happened if they put the presentment through significantly later? I don’t know why they would be putting the presentment through later (usually in the US, from my understanding, it’s to allow for tip adjustment? - but we don’t have that here so I don’t know much about it, we just add the tip before we pay).
Anyway, thanks for posting back and it was an interesting read - I hope support can make some progress on the issue. It may help to point them to this thread!
Coming back to this for a quick update-
Robinhood debit card seems to be affected by the same or similar issue, but it manifests differently, partially due to the way the Robinhood account works. Robinhood doesn’t even bother with enhanced merchant data (the debit card and spending from your cash balance is very much secondary to the stock market trading).
Initial authorization shows up in a separate “messages” section; Robinhood sends a message telling you the name of the merchant, the US dollar amount you were charged, and link to see the “full” details. This is the initial authorization. It doesn’t show up in your “transactions” feed under your cash balance until final presentment is made, at which point the link in the inbox suddenly shows the pending purchase as costing 0, while tapping the final presentment shows the amount of the transaction and “completed”.
In this particular case, initial authorization happened 27 August at 8PM. Final presentment happened on 31 August at 8AM.
Interestingly, Robinhood shows a “transaction type” in their transaction details which I can’t for the life of me find in Monzo. The authorization shows up as “in-person” while the final presentment shows as “unknown”. I feel like this is a clue.
Also, to add a wrinkle to all this:
Oddly, this seems only to be happening at grocery stores, not restaurants. Also, I’m actually currently in Canada at the moment, which has moved to tipping first on the card terminal. I don’t think post-purchase tip adjustment is a thing here, at least not that I’ve seen.