Nationwide/ visa or supermarket / alert on using your card in France

busylizzy2

I have a question for martin
My husband has been travelling abroad and using his debit visa card to obtain petrol on the 24/24 pump on supermarket petrol stations, in France.
Everytime he uses the 24/24 pumps the supermarket takes what I can only call a holding fee, this fee is 120/180 euros, so he gets his petrol to the amount for example of 60 euros then on top of that visa hold this 120/180 euros every time. We thought at first it was one particular supermarket in France so he has tried others and they are the same.
Of course we are not millionares so this has caused us to go over our limit at the bank and returned direct debits which I have been able to get the charges taken off, but my one direct debit they are still charging for non payment which is an extra 20 pounds.
Nationwide says it is visa being lazy, and say If I ring visa I will not get anywhere!!
My bank also says I should go to the supermarket and they should put up a notice in English to warn people this may happen if you use the 24/24 petrol pumps.That's a laugh!!!!
The amount comes off my account after 7 days so where is the money in between time?!!!
This would be terrible if your family were on holiday and thought great I need petrol out of hours my visa card works in France! not knowing the holding fee to be so high, then realize no money left in their account for the rest of their holiday!!
Of course the simple answer is to get a french bank account card, I know.
I would like some answers but do not know where to get them from.

MPH80

Reserving money is a fairly common occurance (as you'll find if you search the forums). Reserving that much - that's more unusual. However, it is done to ensure that there are sufficient funds on the card before beginning a transaction so they know they can take money at the end - it's called a 'PreAuth'.

In theory - the principal works like this:

Retailer does a PreAuth for a certain amount - this reserves the amount in the bank account for a certain period of time until the full transaction is taken. For online retail - this is normally £1.
The Retailer, on completion of the transaction (dispatch of order, or in this case, completion of fueling) sends the Settlement to their bank with, ideally, the same auth code they got from the first step.

Now - this *should* cancel out the PreAuth.

The problem is that 1) Not all banks or payment providers respect the auth code, some discard it and do a new auth (really!) - and this could be being lost anywhere in the system - from the French supermarket's payment provider, through their bank through visa through to your bank and 2) The varying amounts can cause problems with automatic removal systems as it's looking for the right transaction to remove and the conversion rate (which, again, could be anywhere) differs.

The same thing occurs at british supermarkets - ever used Tesco's pumps where it comes up and says "maximum amount £xx"? That's a pre-auth occuring - they've reserved the funds - but that gets sorted by the settlement which cancels it. They may even specifically send a cancel on the pre-auth after you finish fueling.

As to why this is done - it's important to understand that much of the banking world doesn't work in an instant transaction way. They still rely on older style 'APACS' messaging files to actually settle up amounts - and these fly around between the banks on overnight processing runs trying to organise everything. It does work pretty well in fact - given the billions that go through them every day. The ability to do an 'instant' payment from your CC or DC to a retailer is really a bit of a fudge on top of this which checks the amount of money available and does a reservation. It's not until that text file containing the right message gets to the bank that the actual money starts moving.

But it's important that they do do the reservation. Settlement files can take several days to be generated, and then take several more to move around the system. If they didn't reserve funds - we'd have people complaining about how the bank let them overspend and shouldn't the bank have known about the £10,000 they spent yesterday but forgot about.

It just falls down in some circumstances - and you've found one of them.

The long and the short of ALL of this is that if you're concerned about the amount in your bank account - I'd suggest a credit card - you'll never get charged for having the money reserved there (unless you go over your limit). Just clear it in full every month and it shouldn't cost you anything.

M.

MoneySaverLog

I often wondered why ASDA say maximum spend £99 at the pump, now I know.

Another oddity, when I buy petrol at the pump using lloyds tsb debit card and check my online account afterwards my available balance (including overdraft) will normally show that I have £1 less than I should after a few days this gets corrected.

It does not show the £1 debit anywhere on my statement though.

busylizzy2

Hi Thanks for your response I understand everything you are saying
I think holding this amount back on every transaction though is wrong and as you say once they have your fuel lets say from 60 euros then it should not take 7 days for the preauth to come off.
It is only in the last 3months that it has been possible to use an english visa/ debit card at the 24/24 pumps here in France anyway before that it was only possible to pay at cashier with an english card.
I now have a french card to solve this problem and interesting thing is they don't hold a charge or preauth at all.
Anyway I thought somewhere along the line that the everyday joe blogs that goes on holiday etc., should be aware of the pitfall of using there debit card at least on the 24/24 pumps in France.
Thank you

chexum

Apart from what others explained well, there's one more thing: the length of the pre-authorisation time is completely up to *your* bank! It can be 48 hours, or even more than a week. While it's usually up to a mistake by the merchant if this is not returned at the time the transaction is finalised, when it happens, your bank *can* release the funds back to you. Usually they are reluctant to do this (for no reason, the real transaction will go through anyway), but if you insist, they should be able to do it manually. Now making a call, especially from abroad is not always an option, but it's possible.

The canonical answer is this is why we have credit cards where the time and the amount of the pre-authorisation is of little concern considering everyday limits...

But really, the whole system was invented for credit cards, the debit cards are apparently added as an afterthought and in cases like this it's simply not working well. I'd agree that we should not be exposed to the inner workings of the banking system, but the way it's done may not be going away soon...