In response to the recent outcry caused by card pre-approvals during pay-at-pump operations, Asda has suspended their £99 petrol pump deposit trial.
What was the fuss about?
If you’ve ever rented a car you’ll know that rental companies ‘pre-approve’ a transaction for a certain amount to cover your rental and potential damages. The amount varies, but it’s a more o rless universal practice now. The company requests approval for a specified sum and your card company or bank ‘ring-fences’ this amount, maing it unavailable to you. At the end of the rental, the company tells the card provider how much of their ring-fenced amount should catually be paid. The remainder of the pre-approved amount is then restored or freed in your account, generally after a couple of days.
Asda were trialing a system which did the same thing when you paid for petrol via a card at the pumps, and were pre-authorising £99. The problem was that the money was then made unavailable for several days, which amounts to a hostile act if you don’t happen to have plenty of money in your account. Would you top up your car with £5 of fuel if you knew that £99 would suddenly become unavailable to you for a couple of days? Think of those with limited cash and direct debits coming out of their accounts. The banks would rub their hands at the thought of the inevitable unauthorised overdraft charges the scheme would generate, while the unemployed would be advised to steer well clear of the machines.
Asda said the deposit was a holding charge to ensure customers had enough money to pay for their fuel. But following the backlash, Asda said it would “suspend” the scheme pending review because “we always want to do the right thing for our customers”.
The deposit is intended to be cancelled or released as soon as the correct value is paid, but Asda said the scheme requires coordination between MasterCard and Visa and customers’ banks and some banks were evidently not able to comply.
In a statement, Asda said: “The intention of Visa and MasterCard in this trial was to ensure customers had sufficient funds in their account to pay for their fuel, and the £99 would be immediately released back to customers by their bank.
Mastercard said that a change in industry rules last year meant that petrol stations with automated fuel pumps were required to pre-authorise a value equivalent to a full tank of fuel.