Curve card and "bad merchant behaviour"

Abbey1991

Curve wrote:

Declined transactions may appear on your statements when the merchant or retailer declines your transaction (or the transaction fails) and fails to update Curve, causing your payment to be processed. Although this is bad merchant behaviour, it happens occasionally and does not mean that you will lose your money.

Does anyone know if this is true - that a retailer/merchant is supposed notify Curve of a transaction being declined?
Is there any mechanism for a retailer/merchant to inform a card provider?

born_again

All I can think is that they are referring to online transactions where sometimes you get a declined message on retailer site (usually due to time out) but Curve will have already approved it. You do this sometimes and it is the way the background systems work.

Not so much bad merchant behaviour as poorly set up payment systems.

NS&I are a very well known one for doing this....

Any card present declined transaction . The message is automatically given to card provider.

Terry_Towelling

I think Curve has muddied the waters with this statement of theirs. Apologies for the following wordy answer which is partly extracted from working experience and partly guesswork.

When you make a transaction with Curve, the retailer may send an authorisation request to Curve to get the transaction approved. Because Curve is just a stored-value product, my thinking is that Curve needs to make sure it can get hold of the funds from your underlying card before it sends an approval message back to the retailer.

So, almost simultaneously Curve acts as if it is a retailer itself and sends an authorisation request to your underlying card. When it gets that request approved by your underlying card issuer, it will then send an approval message to the retailer and the transaction proceeds.

Problems may occur if your underlying card issuer is slow to send an approval to Curve. This delay is then potentially amplified depending how quickly Curve can recognise the approval and then forward an approval of its own to the retailer. Some retailer systems (or possibly the systems of their processing banks) may have quite short timescales when waiting for responses to authorisation requests. If those time limits are exceeded, the retailer/processor will assume no response is coming and step in to decline the transaction so that the retailer doesn't end up waiting for too long at the point of sale.

If all of that happens, you could end up with an approved pending transaction on your underlying card but the retailer will not process anything because it has received a decline response from within its own systems or from within the systems of its own processing bank. The shop staff will have no idea about all of this behind-the-scenes stuff and will simply see a decline. No transaction should be processed by them if this happens.

So it isn't bad merchant behaviour but the inevitable consequence of running an operation like Curve where each transaction involves two transactions and there are two opportunities for delays to occur.

born_again

Terry_Towelling wrote: »

So it isn't bad merchant behaviour but the inevitable consequence of running an operation like Curve where each transaction involves two transactions and there are two opportunities for delays to occur.

You can double that when you then add in 2 sets of security systems and if online the possibility of VbV or Msecure.

Abbey1991

Thank you, I appreciate these explanations.

Terry_Towelling wrote: »

Some retailer systems (or possibly the systems of their processing banks) may have quite short timescales when waiting for responses to authorisation requests. If those time limits are exceeded, the retailer/processor will assume no response is coming and step in to decline the transaction

If I use, say, a Barclaycard at a shop and that happens, I think I will then see a pending transaction on my account, but it will drop off after a couple of days.
But if I use Curve with Barclaycard, it appears Curve might complete the transaction with Barclaycard, followed by a refund a few days later.

Is that right?

Also I read somewhere that when using a credit card in a shop, authorisations are quicker for low value, low risk transactions because there are fewer checks. Presumably this speed advantage is lost when you use Curve.

Terry_Towelling

Abbey1991 wrote: »

Thank you, I appreciate these explanations.

If I use, say, a Barclaycard at a shop and that happens, I think I will then see a pending transaction on my account, but it will drop off after a couple of days.
But if I use Curve with Barclaycard, it appears Curve might complete the transaction with Barclaycard, followed by a refund a few days later.

Is that right?

Also I read somewhere that when using a credit card in a shop, authorisations are quicker for low value, low risk transactions because there are fewer checks. Presumably this speed advantage is lost when you use Curve.

I think you are more or less correct about the way things would work but I don't use Curve so I can't comment on the way in which they would return the 'stored value'/remove the pending transaction to/from your underlying card.

To answer your final paragraph, for low-value transactions there may be no authorisation attempt in the first place, so that would speed up the process (and there would never be a pending transaction as a result). However, there are other authorisation-handling processes that could come into play. The Payment Schemes (Visa/MasterCard) used to offer a service to issuers called STIP (Stand-in Processing). I don't know whether they still do, or how many issuers still opt to use it, but, where transactions are less than a certain amount (pre-set by the issuer) the Payment Scheme will intercept the authorisation request and respond on behalf of the issuer.

There are rules and issuer-pre-sets in place to govern the way this process works that I won't go into just now but STIP generally works on lower-value transactions and therefore could shave a few fractions of a second off the overall authorisation process.

born_again

Even if a transaction is below the retailer floor limit. You will always see a authorisation (Drop in available funds) on your account.

Even contactless have to go through authorisation now.

TBH. Value of transaction makes little difference. They all still go through the same systems.

Terry_Towelling

born_again wrote: »

Even if a transaction is below the retailer floor limit. You will always see a authorisation (Drop in available funds) on your account.

Even contactless have to go through authorisation now.

TBH. Value of transaction makes little difference. They all still go through the same systems.

Is it true that all transactions definitely now go for auth regardless of amount, POS capture method, retailer type and transaction country?

born_again

Terry_Towelling wrote: »

Is it true that all transactions definitely now go for auth regardless of amount, POS capture method, retailer type and transaction country?

Can't say with 100% certainty, but I have yet to come across any. But can't see every transaction made.
Get plenty of queries where customer asking if a transaction has gone though. If auth is showing then it's a Yes. If no auth, then it's check with retailer.
Not had any come back saying they then have 2 debits.

All contactless are supposed to. But might find the odd small retailer that has not updated something.
We had to advise our catering supplier, as we realised that they were not going for auth when contactless was used after the Visa rule change.

jbryce

Terry_Towelling wrote: »

Is it true that all transactions definitely now go for auth regardless of amount, POS capture method, retailer type and transaction country?

If for example, I pay for my bus fare on Mastercard, I see a pending transaction for 10p, usually about two stops after get on the bus, and then the actual fare a couple of days later.

As it is a bus, it may not always have a signal at the bus stop, but presumably it will upload the transaction as soon as it finds a signal.

Abbey1991

Some more info from their website:

When you make a payment with your Curve card, the merchant – that’s the business that you’ve made a purchase from – sends a message via the Mastercard network to Curve’s processing partner. The processor does some checks on the message, then passes it on to Curve. Curve acquires the funds on the customer’s selected funding card, and passes the result back to the merchant, who completes the transaction. All this happens within seconds. Some minutes or hours later, the transaction is finalised and the funds are moved from your bank, via Curve, to the merchant.