Yep 8% is the “statutory interest” rate, though I think that only applies to commercial debt, it’s at least Monzo showing that, yes they did owe you money / were late in paying it, and goes some way to cover compensation, being the amount the ombudsman would likely apply.
Would be interesting in cases where Monzo held this money and a user ended up in their overdraft / had other fees charged. I imagine they’d have good leverage to ask for that back, if the 8% didn’t cover it.
It’s on any judgement debt.
By paying it already, Monzo is essentially saying they had no reasonable excuse for holding the money
This is pure speculation because I don’t know what happened here but my best guess is that this is money that was kept too long in an authorization hold. If this is the case, then while they would have seen a negative balance, they would not have been charged overdraft fees on that amount as overdraft fees are only charged on non-pending transactions that have actually cleared (this is an FCA requirement).
The 8% is quite common as the interest rate for where a bank has made a mistake and either held money or charged (by any error) and later refunded fees for any reason.
Interesting, so hypothetically one could have a <£0 balance, due to a load of pending transaction, but could be safe from overdraft charges until they clear.
So having a big Apple binge in the run up to payday should be ok 
Mine was 6 months ago but I didn’t get any interest.
It was only £1 for reference.
It is more to stop you potentially being charged overdraft fees on things like hotel and car hire deposits to keep debit cards on accounts with overdrafts in-line with credit cards for those purposes.
It’s far from just hypothetical, I used to exploit this regularly. Takes a day or two for transactions to be presented after all 
That sounds logical but I can’t hear you over buying new apple watch noises
Makes sense though, I’ve tended to use a credit card for those purchases for exactly those reasons, so haven’t noticed the effect I suppose.
I’m surprised that some customers appear not to be getting any compensation as that doesn’t sound as if it’s in line with the FCAs Treating Customers Fairly principle - even if it is only going to be a couple of pence as in your case.
It’s also going to much more expensive for Monzo to deal with individual complaints rather than just paying this up front. I don’t think you would find a so called legacy bank doing this.
In fact, I consider it sharp practice on the part of Monzo nor in line with the ethics that Monzo always like to publically espouse.
I wonder what happens to those with closed accounts and have had the issue and not realised.
It’s probably not going to be a lot of money but still I suppose it has to go back.
Hi all. Let me just jump in to answer a couple of questions.
You should’ve been given £0.04 interest!! 
Why this arbitrary cut-off?
Why not give customers the interest to which their entitled? It’s only a computer calculation. It must cost you next to nothing to calculate this.
I’m waiting for the socially distanced mob
Any update on the full explanation?
Maybe they were hoping you’d forgotten…
I had forgotten, but it’s the top help article for me in the app so it reminded me : )
Alright. Here we go. As you maybe understand, card payments are split into 2 stages, the authorization (ie. pending payment) and presentment (ie. settled funds, when the merchant collects the money) - which usually happen within a couple of days of the authorization.
Most of the time you (the customer) won’t know or care, apart from occasionally when merchants present for different amounts (such as TFL charging you at a later point for the full-amount instead of sending lots of small payments).
We link auth & presentment on what’s called a “lifecycle”. If a lifecycle doesn’t have a presentment within 7 days (or in certain occasions 30 days), we need to revert it, effectively netting out to £0 (you see this as a negative transaction/debit followed be a positive one/credit)
This works 99.99% of the time and we had the impression it worked 100% of the time, based on our test coverage, historical data and the good stability of these services. Then while substantiating our Mastercard accounts (ie. checking that the money in customer accounts - aka ledger movements - is consistent with the Payments we send/receive) we noticed there was a chunk of money that should be there, but it wasn’t (more specifically an amount in the “authorization hold”, or “pending funds”)
After more investigation we noticed a vast majority of these were from payments at a specific merchant (will not mention the name), where they submitted two authorizations (the second one is called a pre-authorization) and a single presentment. This is fine, but the data they were sending us on the second authorization wasn’t completely consistent with our interpretation of the Mastercard specification, so it would match to a different lifecycle than the first authorization.
This per-say is not an issue, as long as we could revert both lifecycles after 7 days. Unfortunately due to our mis-interpretation we couldn’t revert the second lifecycle, resulting on that amount being stuck there until manual intervention. That second authorization was most of the time a really small amount (as most of the time it was tip for a driver, or small additional payments), hence why most people received less than £1 back.
We now have alerts and queries on a daily basis which make sure all funds in a lifecycle either get presented or revert within 7-30 days.
If any discrepancies appear, a member or our payments team has to act on it.
I probably won’t write a blogpost on this - but if you want the technical details, here it is.