Overdraft charges notification and delayed transactions


(Andre Borie) #1

Would it be possible to update the negative balance notification to not mention any kind of overdraft if there’s none on the account? Presumably I would not incur any charges in the following case (as I haven’t signed up for any kind of overdraft) despite the notification saying so.

Also, I think the notification should auto-clear when the account balance is positive again - for example I just had a transaction that brought the account back into positive however the first notification is still there. This will probably mean you should keep track of notification IDs for those and clear them when the account is positive.


Announcing the Overdrafts Preview!
#2

I think you would incur charges for going in to an unarranged overdraft.


(Colin Robinson) #3

Isn’t there a £20 buffer?


#4

No, I don’t think there is any buffer for DD payments. If there isn’t enough in the account to pay a DD it will just be declined in my experience.

There might be a buffer for card Payments though.


(Colin Robinson) #5

Don’t think the screen shot shows a DD payment?


#6

Sorry, yes you’re correct. I’ve mixed up because I was trying to check DD warning notification and that on my phone screen when I wrote the message and it’s very smiler because it also mentions overdrafts which it shouldn’t because I don’t have an overdraft.


(Jamie Penman-Smithson) #7

Usually the transaction would be declined if you don’t have sufficient funds. This relies on the merchant seeking authorisation from Monzo, however TfL are a special case and are allowed to request funds without authorisation. See here for more information - https://monzo.com/blog/2017/05/05/why-payments-are-declined/

If you try to buy something without enough money in your account to pay for it, we decline the authorisation request when it reaches us, and then the payment terminal (or ATM) declines your card.

There’s one exception to this. When a merchant doesn’t send an authorisation request, we don’t have a chance to decline the transaction. A few merchants, like TFL, are allowed to do this intentionally, so long as they follow extra rules imposed by Mastercard.

The next part says this can also happen if the card terminal performs offline authorisation but I believe that is going away in favour of terminals always performing online auth.

TL;DR Monzo can’t decline this so you’ve gone overdrawn as a result.


(Andre Borie) #8

Yes, I understand why this payment has gone through, I’m just suggesting to change the notification text to omit any mentions of overdraft charges unless you agreed to an overdraft, as I can see this potentially scaring a lot of new Monzo users not familiar with these technical details.


(Rika Raybould) #9

As per our terms and conditions, you can still incur our standard overdraft charges without having an active overdraft in a small number of cases where your balance can fall below -£20 (the fee-free buffer) and remains so by the end of the day.

If you do not have an active overdraft, we will, at no cost, decline Direct Debits, Standing Orders, and card authorisations that would take your balance below £0.

In a small number of cases such as this issue with TfL presenting higher amounts than they authorise or sending unmatched presentments, you can be put into a negative balance that we would treat as an overdraft, though with the £20 fee-free buffer and the cost of daily travel on TfL, it is unlikely that fees would be incurred before we have the chance to decline a TfL authorisation, causing your card to be blocked for further travel. :metro:

As for the feedback that the notification should auto-clear, this is totally in the cards for a future revision but we needed to get the notification out this side of the new year. :+1:


(Colin Robinson) #10

Ah, so I did remember it correctly :slight_smile:


(Geoff Pascoe) #11

I got a notification the other day saying my balance was getting ‘close to zero’, and encouraging me to apply for an overdraft so payments don’t get declined. My balance has been exactly zero for nearly two months with no payments that could be declined :joy:


(MikeF) #12

Monzo don’t support the concept of an unarranged overdraft in the way other banks do (i.e. let you spend your way into it by authorising everything) so you can’t ever go into it in quite the same way as elsewhere.

Transport fare charges like the TfL one in the image are special cases that are about the only thing that can take us into an overdraft we haven’t got but I think it would take a couple of days to reach chargeable territory (>£20) meaning there’s plenty of time for a transfer to avoid paying for it…


#13

What about pay at pump? Couldn’t you have £1 in your account and then fill up with £99 worth of fuel?

Would that get authorised?


(MikeF) #14

When I filled up yesterday, the pay at pump did an authorisation before letting me have any fuel so I’d guess not (although I don’t know how much they authorise).


#15

But how did it know how much fuel you were putting in?


#16

But Pay at Pumps differ from country to country. They may in one preauthorise £1 but in another €100. Not sure if that may lead to an overdraft in the one scenario or a position where you can fuel first and still have your card declined later when the increased sum is presented.


#17

I’ve never used Monzo at a Pay at Pump so I don’t know how it works, but I do know that HSBC check the card for either 99p/£1, then the machine says you can fill up to £99. It’s only the £1 that shows in the pending balance until the actual amount is debited a couple of days later. And I know from experience that this can put you into an unauthorised overdraft (with HSBC)

This is at Tesco


(MikeF) #18

Then it’s possibly the same but I haven’t seen this scenario explicitly discussed. It’s always possible that Monzo don’t authorise pay at pump transactions if you have £1 in the account, I suppose. (Assuming that they’re uniquely identifiable as such)


#19

Same for Tesco grocery - Home delivery. They charge account for £2 only.
For £3 I can buy petrol for £99, groceries and some food for around £200 or more…


(Dan) #20

I think this is correct… it would pend a £1 charge, the pump then says £99 limit. You fill up £75 worth… but have £20 in your Monzo… boom… overdrawn a few days later if nothing changes… good job they tell you using the notification so you can fix the negative balance (Y)