Following a recent industry-wide pause on features, we thought we'd take you through a tour of our process and how your money moves. Think of it as a tech-savvy salsa lesson.
When your card reaches the machine it goes through a load of checks in a matter of milliseconds. Technology, ey.
After you enter your PIN or use contactless, the machine checks your balance, card's status, whether you've entered the right PIN, then, if all goes well, it approves the transaction. So next time you're waiting ages for the machine, just think about THAT.
This stage is called the Authorisation.
Once approved, the money is moved from your account to a 'holding bank' - this is the middle man between your bank and the merchant's bank.
After a few days, the holding bank will ask the merchant's bank if they still need the money for the transaction, and the money is moved from the holding bank to their bank account.
This process is called the Settlement.
A few things can happen to disrupt this otherwise seamless process;
- If you make a transaction online but it declines, the money can still go into the holding bank. During the settlement stage, when the holding bank asks the retailer if they want the money, they should say no - and the money will be refunded to your account (although we have no control of time frames for this!).
- The recent hiccup in our service meant that cards failed to move from Authorisation to Settlement, so the transactions couldn't be processed and checked with Mastercard.
Boring as it may be, we just wanted to let you know exactly what happens to your money, and assure you we've given all the appropriate people a slap on the wrist.