Refunds getting faster?

#1

I’ve noticed recently that refunds seem to be getting processed much more quickly than they used to.

With Monese, a refund now shows up in the app almost immediately after the merchant processes it, although it appears as ‘pending’ and is not added to the available balance until several hours later (apart from weekends when it is added on Monday).

With Monzo, the refunds don’t appear immediately, but do show several hours later, or sometimes the next day, and are added to the available balance. They come with a note that says “Delayed from ***”, where *** I assume is the date that they were actually received by Monzo.

I’m just wondering if this is a deliberate ploy by Monzo to avoid confusion by showing the refunds immediately (yet still pending), which is understandable, however it goes against their debit policy of showing transactions in real time.

(Thomas Guthrie) #2

Isn’t the reason for this so your balance shows you what you can actually spend? It makes sense then if credits don’t show up until you would actually be able to spend it.

#3

Yeah I’m sure it is. But I’m more wondering why there is a pending state in the first place on refunds.

I’m sure there is a good reason for it!

(Jolin) #4

I think the speed with which refunds show up is entirely down to how quickly the retailer submits them, but I could be wrong.

I think the delayed from date is when the refund was ‘issued’, but but Monzo doesn’t actually receive that information until later when they get a presentments file (they don’t get a real-time message about it like they do with debits).

…

Just found the source of my vague information. The great RichardR explained the vagaries of refunds here (seems there are a few different ways they can happen):

#5

If @RichardR says it then it is pretty much gospel as far as I am concerned

#6

I think the delayed from date is when the refund was ‘issued’, but but Monzo doesn’t actually receive that information until later when they get a presentments file (they don’t get a real-time message about it like they do with debits).

You may well be right, however I’m not so sure. I don’t understand how Monese would be able to show the actual refund amount almost immediately in the feed and Monzo wouldn’t, assuming they both receive the same information from Mastercard.

I’m pretty sure something somewhere has changed recently anyway. I used to wait 2-3 days for refunds from the same merchants, now it is a day at most other than at weekends…

#7

I can confirm with Monese I seem to be seeing it instantly too

(Simon B) #8

Refund speed is entirely up to the merchant but it can also depend on the length of time since the original transaction was made in some cases.

With some merchants, if it’s only been a small amount of time since the payment authorisation was made, they will simply reverse the authorisation right away and send the amount back to your balance, since it hadn’t been long enough for the payment to present yet. So in that instance, the “refund” will happen very quickly.

It will always take longer if the merchant has fully processed the transaction and made the presentment. In that case they’ll need to make a “full” refund (as opposed to simply reversing the payment auth) and this, in most cases, will take up to a week, but it depends on how regularly the merchant does their batch processing - it could also be a couple of days!

#9

The merchant I’m referring to is Betdaq, an online exchange. Assuming I have the balance in my account I can refund any amount to my card, irrespective of what the deposits were. Maybe these kind of refunds get processed differently, but they show up as a card refund in my account.

There is a 2 hour delay on when the refunds actually get processed by Betdaq. If I send a £10 refund at the same time to both Monzo & Monese, the one to Monese will appear exactly at the 2 hour mark in the app as ‘pending’, then be credited properly after a few hours. The Monzo one will usually appear after a few hours or the next morning, with a note saying “Delayed From…”

(Jack) #10

A question if you don’t mind me asking Simon:

Why are card payments done as presentments (in batches) rather than moving the money across instantly in the same way as faster payments?
Is it becuase thats how the system was originally developed years ago? Seems a bit dated that it works in this way, but maybe there is a reason I don’t know about. :face_with_monocle:

(Simon B) #11

So my understanding is that it’s cheaper for merchants to batch process every few days. There may be other reasons that I’m unaware of!

Why don’t retailers take payments from your account straight away?
#12

that was what I was told by a big UK merchant

(Jolin) #13

I’m pretty sure that with Faster Payments, the money doesn’t move immediately either. I think it gets recorded on a ledger, and the bank marks it as not being available to you, but the ‘money’ doesn’t actually ‘move’ until one big operation (at the end of the day?) when all the FP banks settle up by moving the total amounts owed to each other. This is a very non-expert non-technical understanding of the process, obviously!

(Jack) #14

Ahh ok makes sense, thank you as always! :slight_smile:

I always thought it followed on from older systems when tech wasn’t as advanced and it was easier to process things in batches rather than on the fly when connectivity and computer processing speeds weren’t as advanced. But as with a lot of things the process has never changed from years ago.
Now with everything online and becoming instant I thought there would have been more of move to instant payments. But I guess that would be a mamoth task!

#15

It depends if the banks are direct participants or direct agency, indirect agency, or using FIM. Direct participants will be using a Bank of England settlement account to cover their FPS balance.

EDIT … I should have explained what FIM stands for :slight_smile: it is when they use the FPS File Input Method.

(Simon B) #16

One interesting thing is that we used to reverse un-presented authorisations automatically after 5 days. This ended up not being an appropriate amount of time - particularly around Xmas and the long bank holiday weekend, so we changed it to 7 days.

(Jolin) #17

Yes, I should have said I was talking about my understanding of direct participants (like Monzo) specifically. I thought that although it is all settled through the BoE, it is done in batches on a cycle instead of moving the funds around immediately with each transfer.

#18

These are definitely “full” refunds. The appear in my Monese account (as pending) immediately after they are processed by the merchant. I’m just wondering if Monzo are holding back showing them in the feed until the “pending” status has been cleared.

Like I said though, the refund process using several online merchants to both Monzo & Monese has definitely got faster recently, so something has changed somewhere!

(Simon B) #19

Nope. We show data as soon as we get it.

Are you seeing it with other merchants or just this one?

#20

3 different online merchants. They don’t necessarily process the refund immediately after I execute the instruction online, but I know exactly the time they do get processed, and Monese shows in my account within seconds of that time.

What does the “Delayed from” in the refund notes with yourselves mean?