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Visa Payments Outage: Abandoned Shopping Baskets And Cash Only Signs

Visa Payments Outage: Abandoned Shopping Baskets And Cash Only Signs

On Friday 1 June Visa reported that a hardware issue had caused a payments systems problem throughout Europe. Visa subsequently reported that the issue had been substantially fixed within approximately five hours.  However Visa acknowledged:

“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 the visa account holders for any inconvenience this may have caused.”

This outage is the latest in a series of IT issues affecting the banking and payments sectors. RBS suffered a major outage in 2012 affecting the UK and Ireland resulting in a reported £125 million in compensation payments as well as a £56 million fine.

Earlier this year, TSB also suffered from a payments outage which is reported to have emanated from the transition of customers from Lloyds Bank, which TSB was formerly a part of.

Whilst the Visa outage was short lived, the widespread nature of the issue created significant issues for retailers and banks providing merchant services to retailers. Every abandoned shopping basket (whether physical or virtual) represents potential lost trade. With Visa payments accounting for a reported £1 in every £3 of UK spending, the potential for loss of business in even a five hour window is sizeable.

At Burness Paull we have front line experience of the legal, regulatory and reputational issues arising from payment system outages. If your organisation has been affected by the Visa systems payment outage, please contact our financial services regulatory and disputes team who will be able to advise you on your rights and remedies.

By Stuart Murdoch and Luke Burgess-Shannon

Burness admin