An unhackable crypto wallet hacked?
September 11, 2018Why were chip readers slow to be turned on?
September 25, 2018We are moving slowly towards a cashless society. There will come a time when the dollar bill or the dime are only found in museums or tucked away in an attic. Being able to just use a card or even your fingerprint anywhere to purchase what you need seems to be almost within grasp. Cash though has always been something to fall back on. When you hold a dollar bill you have one dollar’s worth of purchasing power and it doesn’t matter whether the Internet is working or society has devolved into a Walking Dead-esque situation. The good folks of Europe got a taste of what life would be like in a cashless society in June if something went wrong.
Visa experienced a major outage across several nations in Europe. If a consumer tried to use a Visa card during the outage it could not be processed. Millions of people were stuck unable to pay for groceries, gas or tolls just before noon on June 1. ATMs were working so customers made a beeline to them with many of them quickly running out of cash.
Lines quickly got bigger and bigger as customers were stuck at gas stations or supermarkets, with some leaving their groceries at the counter since they were unable to pay. Bar patrons sat at the bar unable to leave since they were unable to pay. Lines of cars at toll booths quickly stacked up creating huge backlogs as drivers were unable to pay their tolls. Travelers depending on taxis to get home from the airport were stranded. For about 3 hours life ground to a dystopian halt as no one knew quite what was going on. Merchants were at a loss to explain why card transactions were being declined until Visa made an announcement.
By about 2:30 the systems had been fixed so that payments could begin to be processed again. Visa said that the problem was a hardware failure and by 8:30 the situation seemed to have been completely resolved and life returned to normal. MasterCard was unaffected but some merchants simply stopped taking card payments and only took cash during the outage. That was if customers had cash on hand.
Obviously for merchants this was a major blow. From the lunch rush to people out shopping on a Friday this occurred at one of the worst times of the day. Visa cards account for about ⅓ of all spending in the UK alone, a major hit to the economy even for just 3 hours.
These are the dangers that we face now and that we will face in the future. While Visa and MasterCard can strive to have their systems operations 100% of the time that will not happen. Whether it is a hardware failure like in this case or a malicious attack these systems will go down. They may work 99.9% of the time but should they go down there is not much you as a consumer or a merchant can do, except pray that cash is on hand. Yep, good ol fashioned cash.