We are aware that some customers are receiving unexpected reversals of card transactions from places such as Pret & Starbucks. These have mistakenly been reversed by their acquirer (company the shop gets the card machine from) and this is impacting all banks. If one of your transactions has been affected, the payment will still complete and you don’t need to take any action.
We’re sorry for the confusion caused, we are doing what we can with MasterCard to find out when the issue will be resolved from their end.
For those who would like to know more:
When you use your card, the shop contacts the issuing bank (Starling) to authorise the transaction if you have sufficient funds. A few days later, the merchant will then finalise the payment to collect the funds. For the time between this, the transaction is considered “pending” and the allocated money is still in your account but not available to spend. You still earn interest on credit balances, and are not charged any overdraft interest for this transaction.
Instead of finalising the transaction to collect the payment, the merchant also has the option to “reverse” it if they decide not to go through with it. This is usually used by hotels etc to remove the “hold” on your card for mini-bar / room charges once you checkout.
Reversals have the effect of freeing up the funds for you to spend again, and removing the transaction from your Starling feed. At other banks, this would remove the entry from the “pending” transactions list that some support.
In the case of all of these transactions, we received an explicit request from the acquirer (company the shop gets the card machine from) to reverse each transaction. We have no choice but to free up the funds and we cannot tell the difference between the reversals being sent by mistake, and all the legitimate ones we receive every night.
We are confident that an acquirer is having systems issues, for the last 2 nights the volume of reversals has been about 7 times higher than they usually are.