Negative Balances

For merchants, understanding the reasons behind customers' negative card balances is key to offering effective support. Various factors, including monthly subscriptions, declined authorizations, and cross-border charges, can lead to such situations. This brief overview will shed light on these common causes and provide insights into resolving negative balances, helping you guide your customers towards better financial management.

Here are a few scenarios that could result in a card having a negative balance

Cross-Border Charges: 

When your customers make transactions in a foreign currency, the card processor will convert the amount into the home currency of the merchant at their exchange rate. This rate can fluctuate, meaning sometimes there will be additional fees for currency conversion. If your customer is close to their limit or has a low balance, these fluctuations and fees can lead to a situation where the charged amount is slightly more than what you anticipated, resulting in a negative balance. This is more likely to happen if the currency in question is particularly volatile or if the transaction happens over a period (like a hotel stay) where the exchange rate changes between the time of authorization and the time of final charge is applied.

Resolving a negative balance on your card is important to avoid potential fees and interest charges. Here's how you or your customers can address it:

Top Up the Card: 

The most straightforward way to resolve a negative balance is to add funds to the card. This can be done through a direct deposit from their wallets into the cards or through whatever means you allow for your customers. Bringing the balance back to zero or into the positive range is essential to avoid additional charges.