Natwest Contactless Debit Card/Authorisation

SM1234_2

Good evening.

So I have a Natwest current account with a contactless card. I seldom (in fact I’ve used it once before today when I sent my OH to the bar with it) use the contactless function as I was under the impression that transactions do not come off the available balance at the point of sale; and therefore could create a budgeting nightmare). I get paid in 2 days and there is money in the bank - just not much of it. So I decided to experiment tonight by using contactless in the supermarket. I was sensible and made sure I could afford the purchase regatfless, but wanted to see what would happen to the available balance; if the funds were left available then no skin off my nose as I would have a bit of extra cash for tomorrow and would be more than able to afford to pay it out of the latest wage. So I tapped the contactless card for just under £13 and it came off my available balance immediately. Which surprised me.
The Natwest website warns that it can take up to 4 days for contactless payments to come off the available balance and therefore you should keep a note of contactless transactions.
I was just wondering how it worked so I could look at using contactless more without the worry of losing track.
Do all contactless transactions authorise at the point of sale? ie if I tried to pay contactless and the funds weren’t available in my account would the transaction decline?
PS I have no intention of spending money I don’t have and sending myself overdrawn

mwarby

Some cards are offline capable (the store doesn't need to contact bank for every transaction), some are online only(the store does need bank authorization for each transaction). Even amongst same bank and account type, the mode set for card can differ.

To add to this the offline capable cards tend to have a maximum number of times a card can authorize a offline transaction before it needs to go online (either card purchase or atm).

I think its becomingly increasingly common for contactless transactions to go online. This is due to both a reduction in potential fraud, and demand for better realtime balances (like Monzo and other new banks do)

You may also find that not all chip and pin transactions reflect in available balance. I noticed a few years ago that for my supermarket transactions would only show as pending(this was with halifax/bank of scotland, who show this in app) the first time they saw a new card, or for transactions above a certain value, other times it would appear a few days later

In terms of using contactless and keeping track, Monzo and Starling (and others I haven't used), haven't failed to show a transaction immediately yet. I've not tried pay at pump, these would be likely exception. In both apps the transaction(name and amount) show in main list of transactions, showing as pending in details

colsten

Banks can only show transactions on your account once they know about them. Whilst they probably know about most of your transactions, there are good reasons for why they cannot know about some sometimes. This applies to both, contactless and chip and PIN transactions.

Reasons for not showing immediately include that the purchase amount was below the shop floor limit, the retailer not reporting to the bank immediately for procedural or technical reasons, network and other IT failures. Here's a good write-up about card transaction processing: http://www.theukcardsassociation.org.uk/cards-transactions/transactional-processing.asp

It remains to be true that the only person who could possibly know at all times how much you spent, contactless or otherwise, old-fashioned or new-fangled bank, is yourself.

There are apps that can help you tracking your spend. If you find it difficult/impossible to track it, you can go to the extreme and do some or all of your spending with cash. Always assuming that your cash withdrawal is reflected on your account immediately which is also not guaranteed though less likely to be delayed, compared with card transactions.

AnotherJoe

What colsten said, e.g. you cannot rely on instant updates to your bank account to keep track of how much money you have, if you are cutting it that close to the wire use a notebook and pen, or an app, or cash, eg if you know you can only spend £100 this week, take it out in cash at the start of the week, split it between you and partner and do it that way with no card transactions.


You will never be able to rely on instantaneous updates from your cards to a bank and the use of a contactless card is a red herring.

SnowTiger

SM1234 wrote: »

So I have a Natwest current account with a contactless card. I seldom (in fact I’ve used it once before today when I sent my OH to the bar with it) use the contactless function as I was under the impression that transactions do not come off the available balance at the point of sale...

From April 2018 - https://www.moneysavingexpert.com/news/2018/02/visa-mastercard-and-american-express-act-to-tackle-contactless-card-security-flaw/:

Following a long-running MoneySavingExpert.com campaign, Visa, Mastercard and American Express are changing the way they handle the majority of payments to ensure they are processed online, so that a retailer will instantly know if a card has been cancelled.

[...]

Visa says it's already tackled the issue for most transactions and Mastercard has pledged to by March, but American Express says it could take up to 18 months to complete the changes.

As recently as last month my small translations at Costa Coffee and Morrisons were processed offline. They seem to be processing them online now.

agrinnall

I concur with what colsten says, and say it myself on occasion. However, there is a concern with contactless, which is that sometimes you won't get a receipt without asking for it, and in some circumstances you won't get one at all (the buses that I use in Birmingham don't issue them, and the same is true of turnstiles on the tube in London), so my recommendation is that you make your own record of these transactions as soon as is feasible afterwards so that you don't forget them.