Monzo, the British digital bank has launched a new feature called “undo payments” allowing customers to reverse an incorrect payment.

They have recognised that trying to retrieve a mistakenly sent payment from a bank can be a long and often painfully drawn-out process, with no guarantee of getting anything back at the end of it.

One in ten people just in the UK have accidentally sent money to the wrong person, and research has shown that almost a third of them have been left out of pocket as a result.

The fully licensed provider has now made it possible to correct a mistake whether that be with the amount sent, who it was sent to, or the fact that it was sent at all.

Customers are the first in the banking industry to now see an option to undo a bank transfer should they quickly realise they have made an error of some kind and want to stop a transaction.

Holders of either personal or business Monzo current accounts qualify to use the new feature.

Small slip can lead to huge problems

It is estimated that Britons send around £825million of error payments annually. It is so easy to punch in an additional zero and it can have incredibly frustrating consequences which are often difficult to correct.

They can also lead to knock-on financial problems with situations arising where not enough money remains in a balance and bills cannot be settled and individuals find themselves in debt, simply because of a slip of the finger. This as has been seen, can effect health and relationships.

Inflexible

When reversing card payments, banks have specific procedures and restrictions that are in most cases, totally inflexible.

In general, it is not possible to simply reverse a payment at any time. There are limitations, including time-frames connected to the particular types of transaction involved.

If disputing a payment, there will be a need to contact the bank in question or card issuer, and they will investigate the matter, potentially involving a chargeback, or other dispute resolution processes.

Errors quickly spotted

Monzo research suggests that over 75% of people who make a payment error realise their mistake within less than a minute of it occurring. So they have come up with the ideal solution, allowing their customers the opportunity to undo a payment wrongly made.

From now on, Monzo account holders who make a payment, will have a 15-second timer appear on the payment confirmation screen, with an option to undo the payment. This is pre-set, but can be altered in the settings to take it down to just 10 seconds, or up to 30 or 60 seconds.

Immediately the button is pressed, any potential payment is stopped from being sent. Basically the money never leaves an account and the person or business that was to be paid will not even know that they almost had some money sent to them. 

Simple solution

Andy Sacre, head of payments at Monzo said: “We know it’s important to be able to send money quickly and easily, but equally we also know that mistakes can happen.

“We are bringing the best of banking and technology together to solve that problem for our customers, with this simple yet powerful feature.”

Fully licensed provider

The Monzo Bank Limited, trade simply as Monzo and are based in London. They launched as part of a wave of app-based “challenger banks” that entered the UK market in the last decade.

In April 2017 its UK banking licence restrictions were lifted, enabling it to offer a full current account and as of last summer they reported having 9.3 million registered users. 

Gradual introduction

The provider have notified all their customers of the change personally with a reassuring message clarifying that they recognise the importance of getting the change right and as a consequence, they are proceeding by turning on the function gradually.

That way they say, they can make subtle improvements based on how people are using it and be able to spot any issues.