New research by Which? has found that more than seven million people have been left unable to use their payment card due to IT glitches in the past year. One in seven people surveyed for the consumer group could not use their debit or credit card due to an outage – equating to 7.3m people if the figures were projected across the UK.
Furthermore, one in 20 of those surveyed experienced the problem more than once. And one in ten of those unable to use their card said they had suffered a financial penalty as a result or said their credit score was damaged.
In a UK-wide survey of more than 2,000 people, the survey found one in seven respondents eight percent of people experienced the issue more than once in the country.
Across the UK, half (49%) of those impacted were left unable to pay for goods and services at the point of sale. Whilst one in ten (11%) of those left unable to use their card or make a payment told Which? they suffered a financial penalty as a result and the same proportion (9%) said their credit score was damaged because they missed a bill or payment.
A year on from the Visa IT failure that sparked a Europe-wide payments meltdown, the findings demonstrate the vulnerability of digital banking and payments and reinforcing the need for traditional payment methods like cash to be protected during the transition to a future where digital alternatives become more common.
Gareth Shaw, Head of Money, Which?, said“Digital payments have enhanced many people’s lives – but many still rely on cash and all of us risk being shut out of paying for goods and services when technology lets us down.
“Meanwhile, people in Scotland risk being stripped of their ability to access cash through the double blow of widespread bank branch and cashpoint closures.”
“The UK government’s commitment to protecting access to cash must see its new strategy group quickly exploring all options – including legislation – to ensure cash is protected for those for whom it is a necessity and as a vital back-up for when digital systems fail.”
Responding to the research Federation of Small Businesses (FSB) Policy and Advocacy Chairman Martin McTague said “As we stand here today, cash remains a vital back-up for when payment card systems fail.”
“We have to avoid moments where shoppers are left in the lurch due to glitches: unable to use digital payment methods and lacking access to a cash point or bank branch.”
“Action is needed on two fronts. First off, we have to improve the resilience and reach of our digital payments infrastructure in the UK – that includes country-wide access to reliable broadband. Second, we need to maintain our cash infrastructure for as long as people want and need it.”
“There’s also the cost factor to consider. Processing card payments can be expensive for small firms. We need to see regulators and terminal providers collaborating to bring these fees down for the good of our economy.”
“Two million consumers still rely entirely on cash for day-to-day purchases. It’s vital that no-one is left behind as we increasingly move to a digital-first shopping environment. Currently, there’s a feeling that we’re cutting too far too fast when it comes to bank branches and ATMs.”
“We look forward to working with the new Treasury-led strategy group on how we can maintain a cash network that is relevant, adaptable and commercially viable.”