Using Monzo everywhere: improving merchant acceptance

(Peter Roberts) #124

Iirc monzo has no choice but to honour offline transactions and will put you into overdraft if necessary

(Simon Porter) #125

I think the problem is if you’re already up against your overdraft limit. What do they do then?

(Andy) #126

You’d go in to unauthorised overdraft.


Seems Monzo are not paying merchants when their customer has ran out of money and overdraft, that’s why rightfully so they are being singled out by airlines.

Monzo will need to start taking responsibility for their dodgy cardholders and not just leave the merchant out of pocket. Forget big companies like Easyjet but imagine a stall holder in a field at a festival forced to do offline transactions to then find out days later they won’t be paid, that could put them out of business.

(Andy) #128

I think this would have only happened during the prepaid card days. Once a transaction has been authorised there’s little chance of the merchant not being paid


So why are airlines still complaining they are not being paid and briefing staff not to accept Monzo against MasterCard rules?

(Andy) #130

Because they aren’t listening to what they are being told

There does seem to be some evidence on here that the message is getting through to easyJet and it’s crew around accepting monzo as a normal bank

(Leon) #131

Because it happened it happened while Monzo was in it’s prepaid period. You seem to be beating a dead horse here. It does not happen now that everyone on Monzo now has current account cards.

(Peter Roberts) #132

The prepaid cards were online only weren’t they?

(Andre Borie) #133

Did this actually happen? Even on the prepaid when I had a few “delayed” or offline payments they still took me into a negative balance so the merchant got their money.


Yes, that’s why airline staff were told to not accept them.
It might be that smaller ones are allowed to go through but the larger ones were too much of a risk to Monzo


I’m pretty sure I read that there were some pubs that didn’t accept Monzo (prepaid) as well (we are talking over 6 months ago now).

People would leave their card behind the bar to run up a tab, and then leave the card there (with no money on it).

I’d be interested to know what would happen on the pre paid card, if the customer did exactly as described above?

Would the merchant end up losing out in those situations?

(Noel Edmonds Beard Sculptor ) #136

Some pubs wouldn’t but I never had that issue and yes people were doing a runner (allegedly)

There was a convo about it a while back, dunno where though @simonb might as he was talking about it I think


Yeah, I remember the conversation, but couldn’t find it on here.

The question was really… What would happen if someone paid an offline transaction (EasyJet for example), or they left their card behind the bar for a tab, but there was no money on it (pre paid)?

(Noel Edmonds Beard Sculptor ) #138

I would have thought maybe the card issuer would have to pay up and then look to the owner of the card for payment?


That would be my guess - But with so many stories (EasyJet/Pub), I’m guessing it was causing “some” merchants a headache back in the day.

(Rika Raybould) #140

I’m happy to report that this is absolutely not what is happening. In fact, merchants aren’t paid directly from the customer’s bank and we can’t decline a collection of money (but can issue a chargeback if the purchase was fraudulent, etc.).

At a high level, what happens for offline payments (and the later finalisation of online payments) is that merchants use an “acquirer” such as their bank, Stripe, iZettle, Square, Worldpay, etc. to send their transactions to the Mastercard network. At several points in the day, these are all processed and a file containing all of those routed to the correct bank in bulk, Mastercard then pays the acquirer who pays the merchant. We’re then effectively left with a large single bill to pay Mastercard for all transactions using Monzo cards that were finalised within that cycle. The file we receive is then processed and the correct amounts deducted from each customer’s account.

I’m not entirely sure where this myth about not being paid has come from but it wouldn’t be anything we have control over. :slightly_frowning_face:

As for pubs and bars, holding a card behind the bar as a tab isn’t officially supported or protected by any of the card payment schemes and is in fact actively discouraged. What happens there is they physically hold the card without checking that it’s even active and then try to check the card only after a tab has been run up. :disappointed:

Flying with easyJet
(Andy) #141

It’s always confused me where this comes from too. Maybe it’s just knowledge from working in the industry but once an auth code is sent to the merchant there’s little chance of the merchant not being paid


Thanks @Rika - Does that cover the “olden days” of pre paid as well?

In theory, what would happen if a customer had a zero balance, and then made an offline payment for £20.00?

(Rika Raybould) #143

That covers nearly all card payments across nearly all schemes and issuers, it’s how the Pay at Pump fraud worked. Low/zero authorisation, large offline payment.

If a customer had a zero balance and then managed to make an offline payment, it would take their balance negative. This is one of the many reasons why our cards are online preferring wherever possible (in addition to being able to provide the real-time feed and push notifications :boom:).

If an overdraft wasn’t agreed, it would then be on us to recover that money (and we’ve gotten pretty good at it!). :money_with_wings: