Debit and credit card holders who've been left out of pocket by the Visa outage which affected payments across Europe on Friday are being told to claim from their banks - if you're affected here's what you need to know.

On Friday a hardware failure meant Visa struggled to process payments between roughly 2.30pm and 10pm, meaning many businesses were unable to take card payments.

In some cases cardholders have found multiple transactions were processed when they tried to make one payment, meaning £100s have been ring-fenced on their card for pending transactions which is affecting how they use their card. Others have lost out in other ways, for instance by having to use a card with a worse exchange rate while abroad.

Visa says the outage was not due to a hack but resulted from a problem with its back-end processing system, and it is working with banks to try and cancel pending transactions more quickly.

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Martin Lewis
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What went wrong?

On Friday Visa had a major system failure which caused intermittent problems processing transactions across the UK and the rest of Europe.

The problem was not with Visa cards themselves, but with its back-end payment processing system. In a nutshell a business takes a customer's payment, and Visa then liaises between the business' bank and the customer's bank to enable the payment to be taken - but Friday's crash stopped this happening.

Given Visa's website says its system is capable of handling more than 65,000 transaction messages a second, you can see why this failure caused such problems. The fall-out left customers facing:

  • Multiple pending transactions – If you tried to make a transaction on Friday and you were told it didn't go through, but it's now appeared on your account, it's likely to be because it was ringfenced as a 'pending transaction'. That means the money hasn't actually left your account - but you can't use the money either until it's been sorted out, if this is causing you a problem the bank can cancel the duplicate transactions.
  • Extra expenses – the outage left some facing higher fees for using their back-up card while abroad, and others fearing they would face charges as their money was ring-fenced by the pending transaction issue above.

For example, Natalie told us her payment went through on the seventh attempt, but she's been left with the prior six pending on her account leaving her with no money.

Ian emailed to say he had a deposit of £500 taken twice, after the initial payment was declined. And here's some of the tweets we've seen:

How to cancel pending transactions and claim compensation

Visa says you should contact your bank if you want to query a transaction, and it's working with the banks to try and speed up the process of removing pending transactions - which in some cases could take up to seven days.

If you don't just want to get a pending transaction removed from your account but want to claim compensation - either for the inconvenience or because you've incurred costs as a result of the outage - collect as much as evidence as you can, including details of any extra fees incurred and any extra phone charges.

Again, you will need to claim this from your bank, here's how to contact them and what they have said about pending transactions and compensation:

  • Bank of Scotland, Halifax and Lloyds – all incorrect pending transactions have now been removed but customers should get in touch if they've been left out of pocket.
  • Nationwide – says it can take up to seven days for a pending transaction to drop off your account but customers should contact it if they need this to be quicker. It says it will ensure customers are not left out of pocket, and anyone who thinks they have been should get in touch.
  • NatWest and RBS – can cancel pending transactions more quickly if customers gets in touch, and says customers will not be left out of pocket.
  • Santander – says it can take between three and seven days for a pending transaction to drop off your account, but staff can manually remove them if you ask. It will look at compensation claims on a case-by-case basis.

'Customers still struggling to get a straight answer'

Guy Anker, deputy editor of MoneySavingExpert.com, said: "While the Visa outage took everyone by surprise, three days later people are still struggling to get a straight answer on how their issues will be rectified - and it's not fair that they are left in limbo.

"In some cases we're talking hundreds of pounds ring-fenced in accounts, and others face extra expenses for non-specialist travel cards while abroad. Consumers need a clear answer of where they need to go to clean up the mess that they played no part in causing."

Visa may be called to give evidence before MPs

MP Nicky Morgan, Chair of the Treasury Committee, has written to Visa asking a number of questions about the outage, including what led to the hardware failure, was there a back-up system and how will it prevent an outage from happening again.

She said: "A third of all spending in the UK is processed by Visa. It's deeply worrying, therefore, that such a vital part of the country's payment infrastructure can fail so catastrophically.

"The consequences were sudden and severe. Many consumers and businesses were left stranded on Friday, unable to make or accept payments, with chaos reported in shops

"The committee has asked Ms Hogg to answer its questions on the disruption. If it is not satisfied with the response, the committee may consider asking Ms Hogg to provide oral evidence."

What does Visa say?

A Visa spokesperson said: "The technical issue we experienced has been resolved. Our network is working normally. If you attempted a Visa transaction that did not complete as a result of this issue, you should not be charged.

"A small number of cardholders may have pending transactions that could be limiting their spending ability. We are working with your banks to resolve this."

How to protect yourself from payment problems

There are a few steps you can take to ensure you're better prepared for any card problems or system outages:

  • Have cards from different providers – Mastercard and Visa process payments and so having one card for each of these networks could be useful, but we're not suggesting you apply for a new account simply for this reason. American Express also processes some transactions. It's worth remembering the Visa outage was a back-end problem and so some Mastercard holders couldn't use their cards either.
  • Consider a back-up with a different bank – Again, we're not saying it's necessarily worth opening a new account but if you have multiple accounts it could be worth holding at least one with a separate banking group (eg NatWest and RBS are part of the same group) so you've got a back up if one particular bank has problems.
  • Carry cash – obviously it's not a good idea to carry lots of notes but having a small amount could be helpful.
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