On 1 June 2018, Visa Europe suffered an outage that affected thousands – if not millions – of consumers. People were unable to make transactions or even withdraw cash. While the system was back running by the end of the day, what damage did it do? Patrick Brusnahan writes
The full extent of the issue is not yet clear, but Visa is still investigating the cause of the problems.
Visa Europe said in a statement at the time: “Visa is currently experiencing a service disruption. This incident is preventing some Visa transactions in Europe from being processed. We are investigating the cause and working as quickly as possible to resolve the situation.”
Other card payment facilitators, such as banks, were also impacted. Lloyds Bank released a statement saying: “We are aware of an industry-wide issue effecting Visa payments which is under investigation. ATM and Mastercard transactions are not impacted. We are working to resolve the issue as quickly as possible.”
Following the outage and with Visa Europe back to full capacity, Visa CEO Al Kelly said: “Our goal is to ensure all Visa payments work reliably 24 hours a day, 365 days a year. We fell well short of this goal today, and we apologise to all of our partners and Visa account holders for any inconvenience this may have caused.”
This could cause a huge reputational damage for Visa, given its market share. Visa accounted for 96.8% of the overall debit card transaction value in 2017; Mastercard only had 3% of the debit cards in the UK in 2017.
While Visa will be trying to recover from the outage, Mastercard could take advantage. In July 2017, Mastercard signed a seven-year contract with TSB – a bank that has had its own outage problems. This would make TSB the biggest issuer of Mastercard-branded debit cards in the UK.
If Mastercard proves reliable in the wake of TSB’s architecture issues, and if Visa makes another mistake, we are likely to see a shift in market share in the UK.
Guest Comment: Back to Cash after Network Crash?
How many of us carry enough cash in our wallets to pay for our daily lunches, lattes and train fares? Last year, card payments overtook cash in the UK for the first time, and it was announced in May that you can even tip buskers in London without handing over cash.
It is estimated that contactless payments now make up a third of all card purchases. Coupled with instances such as the recent Visa outage, payment providers are facing growing pressure to ensure downtime is kept to a minimum. Consumers will favour the most convenient payment options on offer, and if these instances become more regular, they could potentially revert to relying on cash again.
Organisations will need to plan to ensure the chance of transaction failures is mitigated in the first instance, or ensure downtime is minimised when it does go wrong. The industry needs to ensure that, in the case of failure, technology can either be identified at a central location, through data centres, or switched out in-store as soon as the problem arises.
The reliance on this tech has obvious benefits to both merchants, who receive funds into their accounts faster, and also consumers, who benefit from a more convenient retail experience.
The recent Visa outage was accredited to “hardware failure”, affecting thousands of consumers across Europe. The company said its goal is to “ensure [the network] operates 24 hours a day, 365 days a year”, something that all of us – consumers and merchants alike – take for granted these days.
We predict that, regardless of this recent issue, retailers will face increasing pressure to provide more cashless options as consumer demand for tech grows. Consumers have become accustomed to one-click payments online, expecting the same easy transactions when in store. Their shopping experience must be seamless, and as such, data centres and merchant providers need to offer same-day fixes to keep shoppers shopping.
Our recent research finds that retail technology downtime is leaving one in three UK shoppers unable to complete purchases. Although outages such as Visa’s are rare, the survey also found that two-thirds of consumers had experienced wider payment technology hardware failing on at least one occasion. Despite this, customers still want innovation: findings show that three-quarters of consumers support in-store technology that makes their experience as seamless as possible.
Payment providers will have to work closely with merchants to minimise downtime, making sure they experience fewer faulty contactless machines or unresponsive touchscreens. Technological advances will be essential in making sure high-street retail remains an engaging experience for shoppers. If this is to happen, the payment industry and merchants alike will need to work closely to ensure reliable, same-day fixes to failing tech, avoiding lost sales and making sure we continue our love affair with contactless.
Claudine Mosseri, general manager – field support, ByBox