Card providers to 'reserve' up to £100 when you pay at many self-service fuel pumps – here's what's happening
Motorists paying for fuel at many self-service pumps face having up to £100 on their debit or credit card temporarily "reserved" while they fill up, to make sure they can afford the petrol or diesel. While people will naturally spend some of that £100, many report waiting days for the unspent portion to be returned, which could leave them struggling to pay for bills in the meantime.
How the new system works
The practice, which has been implemented by payment providers American Express, Mastercard and Visa, was already in place at many major forecourt 'pay-at-pump' services, such as those run by BP and Esso.
But this is now being rolled out to major supermarkets. About 60 Sainsbury's pay-at-pump sites have already adopted it, while Tesco has rolled it out as part of a pilot at a small number of its sites. Asda has also now rolled out the change to one of its forecourts and we're checking if more will follow. Morrisons had previously told us it planned to roll out the change too - we've asked for its latest position and we'll update this story when we know more.
Here's how it works for those paying at pumps that employ this system - you should be informed at the pump if this is going to happen:
- If you have £100+ available then £100 will be reserved on your card when you pay at the pump. However, your account is only billed for the amount spent and the rest is returned (though that return can take some time). Unused reserved funds never leave your account but they temporarily come off your available balance. They should revert back within minutes if the system works correctly but we've seen reports on social media of people waiting up to five days.
Until funds are returned it can leave some people unable to pay bills if close to their limit. In addition, if you don't have funds available to pay those bills you may get charged by the other provider, for example, a mobile or mortgage firm expecting payment. Some Twitter users have raised concerns about being unable to afford bills, for example:
- If there's less than £100 in your account or on your card balance then whatever is available will be reserved. Again, you'll then be billed for the actual amount used with the rest of the funds returned. The pump will cut off automatically once you reach your available balance, meaning you shouldn't be taken over your spending limit or pushed into an unarranged overdraft.
- If you don't have any money in your account or left on your card balance then you cannot use that pump.
Visa and Mastercard have confirmed the change affects all cardholders who use the pay-at-pump services that employ this system.
What to do if reserved funds aren't immediately returned
If your available balance is lower than what it should be due to reserved funds taking too long to be returned and you urgently need to spend the cash, here's what to try:
- Contact your card issuer to ask it to speed up the reversal or ask for your overdraft/credit limit to be temporarily increased. By card issuer we mean the bank, building society or credit provider, such as Barclaycard, Capital One, HSBC or Nationwide (not Mastercard or Visa).
- Take your complaint to the ombudsman if a delay to funds being returned has caused you financial hardship and your card provider hasn't helped. If your bank or building society hasn't responded to your complaint within eight weeks or you're unhappy with the response you get, you can take your complaint to the free Financial Ombudsman Service.
It will consider whether your provider should put you back into the position you were in before the transaction, for example, covering the cost of any related fees incurred or removing a mark from your credit file. See our Financial Ombudsman guide for help doing this.
If you pay at the kiosk in person, you won't have £100 reserved
The easy option to avoid the £100 card reservation is to go into the garage and pay the cashier directly, rather than pay at the pump. Here, the £100 ring-fencing won't take place. Of course, you may not be able to do this if it's out of hours and the kiosk is closed.
This new system was first trialled in 2016
The system was initially trialled by Visa at pay-at-pump services in 2016 and was introduced by Asda in 2018. But Asda then scrapped the scheme after some people found it took days for payments to be released back into their accounts. Visa says these issues have now been resolved, although we've seen reports from shoppers who say they've recently experienced a delay getting their ring-fenced cash back.
For pay-at-pump services that haven't yet switched to the new system, a £1 'pre-authorisation' fee is taken from your account to confirm your card is active before you fill up. The exact cost of the fuel then appears on your account typically one or two days after the transaction.
What do Amex, Mastercard and Visa say?
Mastercard and Visa told us the move should prevent shoppers from falling into unarranged overdrafts because they won't be attempting to buy more fuel than they can afford. They add that it should also make it easier for people with basic bank accounts to access pay-at-pump services as their cards are declined automatically under the old system. We've asked Amex to comment and we'll update this story if we hear back.
Banking trade body UK Finance says it supports the change. A spokesperson said: "UK Finance supports initiatives from the payments sector to make paying for goods and services easier."