Debit Card Declined?

What type of card was it? Most hotels do not accept Visa Electron or Solo Debit Cards or so I was told.

They were both regular current account debit cards displaying the maestro symbol - not electron or solo. Our cards have the words "servicecard 250" whilst my wife's aunt's card is guaranteed to 100 GBP. I wondered if the bill (>1000GBP) was the problem but the NatWest manager assured me it wasn't.

Neither party has had any problem with their card before and the hotel seemed happy enough to insert them into their card reader. As a matter of fact my wife bought her car on her card - though it did involve speaking to the bank.

Thanks Jeff

Isn't that to do with Cheque Guarantee, not debit card transactions?

Probably a glitch in communication between the terminal and the bank. If the authorisation system can't contact the bank's computer to authorise the payment, it will report it as being declined. The credit card worked because that's authorised by the card company (Mastercard or Visa) rather than the issuing bank, so any problems on the link to the bank won't affect it.

There is nothing you can do about this - the problem is in the communications network. It's not particularly common, but it does happen. When I managed an online retail system, we'd get maybe one or two complaints from customers a month that our website had declined their card even though it was perfectly valid and there were sufficient funds in the account. It does happen more often with debit than credit cards, mainly because the authorisation process is more complex (a lot more different banks to talk to than different card companies, and the authorisation process is different for debit cards). So, essentially, your bank manager was right.

Mark

That's terrible. The system should not have just two possible outcomes (accept/decline), and if it can't get through, it should say so.

In particular, if a merchant advertises that it accepts payment by debit card, then a customer ought to be able to turn up with no cash, no cheques, no credit cards, just the debit card, and be able to rely with confidence that it will be accepted. A mere communication problem should not make this impossible, i.e. as with credit cards it should be possible to revert to a backup system whereby perhaps the merchant has to phone the bank.

I'm inclined to agree with that, but AIUI part of the point is that the system deliberately never gives a reason for declining a transaction as that could give useful information to a potential fraudster.

The costs of making it 100% reliable (as opposed to merely 99.99% reliable) would not be worth it, as they would inevitably have to be passed on to the customers (both vendors and cardholders) and the customers would not be willing to pay for it.

In any case, phoning the bank isn't going to help if the bank's own staff can't access the data due to the computer being offline.

Mark

That's as may be, but inability to contact the bank is hardly useful information, and in any case inability to contact the bank is not really a valid reason to decline.

The vendor will need to balance that putative cost against the cost of losing a sale when a customer's payment is refused.

I take your point, but just because the computer system is unreachable by the normal merchant authorising route doesn't mean that it is totally offline and unreachable by all routes including from the bank's own staff.

Especially when, as has happened to me, the merchant (a catalogue company in this case) makes a charge for declined payments (whether credit/debit card or cheque)

The cost of making it 100% reliable is infinite. In act it is beyond infinite, as it is just not possible.

Could it be that they have security checks on the pattern of usage? I usually only use my debit card as a cash-machine card - maximum permitted withdrawal £200 per day. The first time I tried to use it for online purchase of unit trusts - several thousand pounds - it failed. Had to contact the bank who said their random security checks had stopped the payment - they had to put a release on the thing so that I could complete the transaction. It seemed that some unusual, particularly large, transactions might or might not be stopped. Next couple of times I was going to do a similar transaction, I called them beforehand to make sure it wouldn't be trapped. Now they've changed their security policy and pre-authorisation by phone isn't accepted. Same bank also used to recommend you phoned them before foreign holidays, to let them know the destination and period so that an unusual pattern of payments wouldn't freeze the card - they now say this is no longer necessary. There are problems with this sort of security if you are the type of person who mainly carries a card to ensure they can make unusual and exceptional payments in an emergency

- you don't want the card to fail just when you need it.

Toom

It depends what you mean by 100%. Clearly the scenario (of a dialup machine failing to get through to the bank to obtain authorisation automatically) occurs often enough that many people know someone to whom it has happened. That's often enough, I think, to make it worth a merchant having a Plan B in place for cases when a customer has no alternative means of payment.

Now, that plan B could be as simple as trying again, and if it still fails, phoning for authorisation. The cost of that is hardly infinite.

A plan C might be be to carry the risk oneself (I think large merchants do this routinely anyway, using a "floor limit"), and accept payment without authorisation, or to ask the customer to send a cheque when they get home, or to come and pay a day or two later. If the merchant knows the customer, the risk involved will be as good as zero. If not, the risk of becoming a fraud victim is still very low, because: (a) it is low anyway, (b) the fraudster would have to have prior knowledge of the connection being compromised in order to exploit this weakness, (c) the risk is further diluted heavily as a result of the scenario itself (of the connection being down) being relatively infrequent.

Again, hardly infinite.

Er. Isn't that, like, completely outrageous?

I think so, but that was in their T&Cs. They sent a monthly statement, which could be paid by sending a cheque in the post, making a payment by cash or cheque at a bank, or by credit/debit card online or by automated phone line. They treated a failed card payment in the same was as a bounced cheque and added a charge to your account. The problem being, as has been stated in this thread, that card payments can fail through no fault of the cardholder.

Ah, but you're being a little unfair in describing this as a charge for a declined card payment. It would seem that in fact it is a charge for not settling your monthly bill.

It's still outrageous, of course, since they ought to have alerted you that the payment failed, which would (unless you'd already left it to the last minute) have given you a chance to do something about it before the deadline, like try again by the same or a different method.

Mmmm.... Interesting stuff.

Not quite the same scenario, but.... We got caught out when buying a big ticket item from DABS. Barclaycard's anti-fraud system clicked in - so the xaction wasn't authorised until I had spoken to them. I then incurred a (fairly modest) surcharge from DABS.

My view was (and is) that DABS had extra hassle, so were entitled to charge something for that. Equally, I've found B/card's anti-fraud procedures very reassuring and competent on a number of occasions.

For the record, I hadn't read any T+Cs. But was anyone being outrageous in this example...?

Thanks to everyone for the helpful replies and discussion.

It does sound like there was a 'glitch' between the merchant and the NatWest banking system somewhere along the line - which would explain why both NatWest cards were declined.

One worrying fact that I didn't mention earlier is that the Hotel said they wouldn't be able to accept a checque from my wife's Aunt if it was drawn on the same account as the declined debit card! Since she refuses to have anything to do with credit cards that would have placed her in a very difficult position if we hadn't been there.

Thanks again Jeff

Thankfully, it doesn't work like that... it's the hotel which would have been left in a very difficult position...!!

At 21:10:43 on 31/08/2008, Mark Goodge delighted uk.finance by announcing:

Nonsense. Mastercard and Visa do not authorise transactions for UK issuers. If the issuer cannot be contacted then the decision will be made by the acquirer (or the terminal acting as its proxy) and the card based on their risk management settings.

At 09:24:25 on 01/09/2008, Ronald Raygun delighted uk.finance by announcing:

When dealing with debit cards, one also has to consider the fact that the customer may not have the funds available.