As someone who has cards that settle after ~48 hours and cards that reflect the state of transactions immediately I can clearly state that I heavily prefer the former. The reason for this is that many transactions are not that simple and you end up with a ton of spam on your statements.
I like what Lloyds does where it shows transactions not fully settled yet in a separate section in the panel.
Number26 uses any auth message in the log and it's a nightmare when you travel and later try to consolidate your bills with your credit card statements.
I will forever be against long settlement times for debit accounts. It reminds me of when I was in college and living paycheck to paycheck. Here in the US many banks have a scheme where they will purposely order your settled transactions from highest to lowest amount in order to charge you more fees should you run out of cash in the account.
Say you have $100 available and make 3 purchases in this order: $10, $10, $105. The bank authorizes all three transactions but orders them in decreasing value instead when the account settles. The first $105 charge hits your account causing you to be overdrawn and adding a $35 overdraft fee, then the two additional charges add an additional $35 fee each. So instead of settling the charges in order and being charged one $35 fee, they charge three $35 fees. And if you can't bring your account positive in time? Another fee, naturally.
It's been a while since I experienced this, but I feel for people who are less financially well off like I once was who still have to deal with this. I think banks now make it an option to disallow overdrafts, but by default they're allowed to "avoid embarrassment" when shopping.
http://www.federalreserve.gov/newsevents/press/bcreg/2009111...
It is weird that transactions for the underground start as 20p then randomly increase to £2.30 (or whatever).
As a computer person I quite like seeing the detail of what's going on with the clearing process. In the end I think Mondo want to be more mainstream than for a geek like me (i.e. they removed custom tagging - I wanted to do things like add tags for when corner shops rip you off and charge you 50p for using your card)!
The API for their bank looks promising though so if you don't like it you can just treat them as an API and consolidate everything yourself, maybe.
BTW. Thanks for Flask, I use it every day and it's excellent :-)
1) Restaurants will auth your credit card for the bill total, but will capture for bill + tip. So pre-settled totals will not include tip.
2) Gas stations auth your card when you scan (before the pump turns on). They auth for $100, but will then capture for whatever amount you spend.
3) When you add a card to certain merchants (like the Google Play store), they will do a 1 cent auth to make sure the card/address/expiration are valid. But then they never issue the capture and the event disappears.
You scan a contactless card and they do a £1 authorisation the first time you use it (on Amex at least, I've heard it is different on other card networks). They then total up the amount you use it and start settling it when you reach a certain point. This is because there are quite complex rules:
1. If you don't "tap out" of a tube/train journey, they charge you the maximum fare.
2. They don't know at authentication time where you are going. You could be doing a journey within an outer zone which would only cost £1.50 or you could be doing a journey all the way from zone 6 into zone 1 which would be, say, £5.60
3. Different fares apply peak and off-peak
4. There's a "price cap" that applies - so you can't go spend more in one day than the cost of an unlimited use one day travelcard that covers all the journeys, and you can't spend more in one week than the cost of an unlimited one week travelcard.
In practice what happens is you just keep using contactless and the system settles the payments up right pretty much all of the time. They've done some clever thinking to make it work.
The downside: now that people have the same card in multiple 'forms' (e.g. as an actual card, and as a virtual card on Apple Pay or whatever), you can't switch between then without breaking this complex set of rules in some ways. You can register an online account and all your contactless cards to it, but you can't then keep switching between cards (or between cards and virtual cards) without things breaking. You pretty much have to just choose one payment method (either a card or Apple Pay) and stick with it.
In (3) its also sort of an escrow service, but not really.
Similarly, this is why merchant processors are required for a lot of companies to do business over credit networks. They too hold money for some N days before it is released to a merchant (after clearing) - as escrow to the card issuers in the case of chargebacks and other fraud.
We think we can avoid that. It's going to be hard to get it right all the time but over time we should be able to learn which transactions settle for amounts less than or greater than the author amount and show these in an appropriate way.
Could you explain what problems you have consolidating your bills with credit card statement - I'm not sure how number26 do it but after 48hrs our statement should be the same as if we didn't show you the auths.
In case of Number26 the times are completely broken when you travel to the US. For instance I get a pre-auth at the time the charge is made with one merchant ID, but that gets reimbursed at a later point and re-charged with a new (slightly different amount because currency fluctuation) and no direct correlation to the previous transaction.
The worst one was where the card was actually charged but reimbursed and re-charged + tip. However the reimbursed money did not match the original amount :-/
And the time between those different charges is way beyond 48 hours.
In particular, if you don't capture geolocation data within a few seconds of a payment, it becomes irrelevant.
