What are Offline Transactions?
An “offline” transaction can occur due to the following reasons:
- If the card machine - also known as a Point of Sale (POS) terminal - cannot connect to the Payment Network. The Rooster Card uses VISA’s Payment Network.
- If the card terminal chooses to authorise the payment without requesting authorisation from the Payment Network.
- If the terminal chooses not to honour the authorisation response. E.g. Some card terminals are authorising the payment when the card has hit it’s SCA limit as described here.
There are some terminals which can’t connect to the Payment Network, such as a terminal on a train or plane. These terminals use a process known as batching to make note of the payment, but this results in an authorisation being received much later than expected. For example once the plane has landed or the train gets to a station. If this authorisation gets declined, this is when you will see an Offline authorisation appear within a couple of days.
There are some terminals that are configured to approve any purchase on a debit card below £5. We are working with the merchants of these stores because they should not be doing this for prepaid cards.
Sometimes offline transactions can cause unexpected balances if the card is used to buy something else afterwards which leaves the remaining balance less than the charge that was made offline. When the charge then comes through, if there isn't enough balance on your child's card, it will force the Spend pot into a negative value. In these situations, a parent will just need to boost the child's Spend pot or move money from another of the child’s pots to make up the difference and get the account back to zero. These transactions will rarely qualify for chargeback because the goods were received, however rights are not affected for faulty goods etc.
Why has an adjustment been made on my statement?
An adjustment happens when the original authorised amount differs from the amount collected by the merchant. The authorisation should be viewed as permission E.g. I allow this merchant access to an amount of money on my account. The merchant then processes these authorisations - usually overnight - where they collect the money from the Payment Network. This process is known as settlement, e.g. settling the funds that was promised to the merchant.
There are a number of reasons a balance can be adjusted (We are working hard behind the scenes to make sure these adjustment messages are clearer).
When using your card abroad / buying things in a different currency from GBP
When paying for things not in GBP, when a card authorisation is performed, it uses the exchange rate at that point in time. However the settlement will be performed a number of days afterwards, by which time the exchange rate may have changed.
For example, if you buy an item for €12 euros and the exchange rate was £1 = €1.1 euro’s when the authorisation was made, you will see a charge of £10.91 on your account. If by the time the merchant collects the money the exchange rate has changed to £1 = €1.2 the merchant will still collect their €12, but this will now only cost your account £10! Rooster will then make an adjustment to return the £0.91 back to your account.
Note: with FX transactions the rate can fluctuate in either direction so the adjustment can also be negative. At the point of authorisation most companies (Rooster included) will authorise an amount slightly higher to protect against over spending. This hopefully means that most FX adjustments are returning funds to your account.
Settling a single authorisation in multiple parts
An increasing number of online merchants are settling a single authorisation in multiple parts. This can cause an adjustment where we return the difference. Be aware this is likely to cause a further adjustment when the second / third part is settled.
An example would be where you order two items from an online store. The first item is in stock and gets shipped immediately, however the second item is shipped 5 days later when stock arrives. Some merchants will settle the value for the first item the day after that item is shipped, and then settle the remaining balance the day after the second item is shipped. Others may settle the whole amount on day 1 or after all items have shipped. We have to process an adjustment in these scenarios in case the merchant does not ship an item (we are working with our partners to make this process easier to understand).
When a merchant authorises a card for a service but the balance ends up being more
A further case which is less likely to occur for children but is worth understanding, is the use of your card to book a hotel room, where you authorise the amount for the room on arrival (or before). However during checkout your bill may have changed because you've used services such as the mini bar. In this scenario the hotel will request a higher amount than authorised from your account resulting in a difference between the authorisation and the settlement. This is also an adjustment.