Details are emerging about the May 2016 prepaid glitch that hit a triumvirate of heavy hitters in the payments and retail space — namely, Green Dot, Mastercard and Walmart — and the scope has finally been quantified.
As first reported by American Banker, more than 58,000 customers using Walmart branded prepaid cards were affected by their inability to access funds loaded on those cards. The outage lasted several days. In addition to being unable to access funds, some customers were unable to activate new cards or view account balances.
The additional details came to light as all three companies offered up written accounts as to just what transpired. Those accounts were provided to U.S. senators who had requested the information, and the letters provided to those senators — Sherrod Brown (D-OH) and Robert Menendez (D-NJ) — were, in turn, obtained by American Banker.
Green Dot explained in its missive that it had been in the midst of migrating processing services tied to its 2 million active prepaid accounts when the outage occurred.
Green Dot said that roughly 1.2 percent of its active card base, which numbers roughly 4.8 million, had been hit by the service outage, and of the 58,000 plus that had been affected, roughly 12,600 were stymied from activating new cards or activating replacement cards. More than 41,000 accounts had transactions declined because of low balances that were reporting errors. The remaining amount — about 4,500 accounts — were calculated as they came from complaints to various regulatory agencies.
Mastercard, for its part, said that, for several transactions, authorization holds were not released as they should have been, and in some cases, there were duplicate authorization holds in place. And in still other cases, lower transaction authorizations were in place than should have been allowed. The firms also stated that there were communication snafus.
Walmart has said that it has been working with Green Dot to monitor in real time updates to the prepaid card company’s systems that also are responsible for the Walmart MoneyCard program.
Michael Manchisi, president of Mastercard’s Payment Transaction Services, stated in his letter to the senators: “Despite careful planning and extensive testing, advance systems and experienced personnel, issues do arise in processor conversions due to factors including the complexity of systems and functions and the large quantity of data transferred and uploaded.”
One issue that remains unresolved centers on just when systems and cards became fully functional. Green Dot stated that everything was fully functional by May 19, while Mastercard said issues were resolved by May 21.
Green Dot said in its letter, according to American Banker, that it has given credits worth roughly $50 per account, for a total of $3.3 million; other accounts had balances that were higher than they would have been absent the aforementioned errors, and those customers were allowed to keep the overages.