How are payments processed?

Updated 5 months ago by Clifford Christophe

When someone pays with a Lydia card, the money isn’t automatically transferred from his/her Lydia account to the merchant's account.

There are several steps to processing payments.

Processing payments in two steps ✌️

Two main steps are required for a transaction to take place:

1. Authorisation

This step ensures that the Lydia card is valid and that the money is available on the linked Lydia account.

It starts as soon as the PIN is entered and/or the card is tapped against the payment terminal for contactless payment.

If everything goes well, the merchant's bank will be entitled to debit your Lydia account. A "PAYMENT APPROVED" message is displayed on the terminal confirming that the payment went through. However, at this stage the money has not left your Lydia account yet. It is only been made available to the merchant as a reserve to be captured later.

2. Capture

This step means the sale is complete: Whether you are leaving the shop or turning off your laptop. It’s a done deal. A payment notification shows up on your screen if push notifications are enabled.

However for the merchant, the payment isn’t complete. As long as the merchant has not claimed the money set aside on the Lydia account, it is still considered as a processing payment. It is only when the payment is captured (i.e. when the merchant claims their money) that the payment is complete.

Capture can take up to 10 days. Some merchants are faster than others to claim their payment.

What are the consequences for card payments? 🤔

Standard card

When you pay with a regular card, it takes several days to show up as a debit (money that comes out of your pocket) on your bank account. That is why most users never realise that some merchants took a few days to capture a payment.

Lydia card

When you pay with a Lydia card, it appears instantly in your transaction history. You can check your payment status as soon as you leave the merchant and until he/she claims the payment on one of your Lydia accounts.

Why are my payments cross-hatched? ⏳

As there can be a delay between authorising and capturing a payment, payments sometimes appear as crossed-hatched in your transaction history. We use this to single out processing payments: Payments that have been authorised but not yet captured by the merchant.

The money spent has been blocked on the Lydia account. It cannot be used for another purchase but it has not been claimed yet by the merchant's bank.

Until merchants come and get what you owe them, payments will remain crossed-hatched. When they are no longer crossed-hatched, it means the money has been taken from the relevant Lydia account.

What happens if the amount authorised is higher than the amount paid? 📱

Some merchants may use payment authorisation to block a flat fee on your Lydia account. The amount might be higher than what you have actually paid. It is a temporary deposit.

It does not mean merchants took more than what you owe them. They only blocked on your account a higher amount than the amount due. Capture will offset the amount. Merchant will eventually only take what is due and it will all balance out in the end.

What are the most common deposits? ⛽

Automated fuel pumps

An automated filling station can request a €120 payment authorisation on your card even before you start filling your petrol tank. So what happens if you only use €100 worth of petrol?

  • In most cases, the petrol station’s bank will take money from your Lydia account a few days later to capture your payment.
  • But this time they will only claim the amount due (€100 in that case).
  • The remaining €20 which had been frozen in your account is released and can be used for another purchase with your Lydia card.

Some vending machines in the subway

Some vending machines operators (like Selecta) can freeze up to €15 in your account even if you only buy a €2 bottle of water.

Everything comes back in order after a few days when the payment is captured. The cross-hatched payment disappears from your transaction history and we correct the amount displayed to match what you actually paid for.

Public bicycle terminals

You may also see a €/£150 payment after hiring a public bicycle, even for a very short trip. This is the amount authorised by the merchant, not the amount that will eventually be charged on your account. Just give it a few days and everything should be sorted out when the payment is captured.

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