Thousands of consumers in the UK have reportedly been unable to use contactless or mobile payments at the top merchants in the country due to a widespread problem.

On July 11, hundreds of early consumers reported problems on social media with Visa and Mastercard failing to process contactless or card payments.

Leading UK shops were forced to switch to accepting solely cash as a result. One Sainsbury's store has a notice asking consumers to pay with cash for their purchases.

The store announced on social media that there was a "nationwide issue" with card payments.

Asda further acknowledged that it was aware of the problem and was attempting to resolve it.

More than 600 users reported a Visa problem and more than 100 reported problems using Mastercard to make payments on Down Detector.

"We are aware of certain payment transaction issues at select merchants in the UK," a Mastercard representative stated. As of right now, there is no evidence that these problems are connected to our network.

Will there be more payment outages in the era of digital technology?

Following problems at major UK banks starting at the end of June, there have been verified payment outages at a number of the country's biggest shops. These issues have caused delays in customers' pension payments and missed paychecks.

Issues with Nationwide, HSBC, and Virgin Money's banking services affected their consumers as well. This had a significant impact on personal budgets for many.

At the time, statements were made by Virgin Money, HSBC, and Nationwide indicating that they were aware of problems with their online and mobile banking services.

This incident happened after a four-hour NatWest banking services outage in May.

These kinds of problems, whether they relate to financial services or payments, often appear out of the blue and there will undoubtedly be more in the future.

The consequence of the outages, which are typically quickly fixed, is not as important as the effect they have on customer confidence in digital payments and contemporary financial services.

Impacting customers' faith in online financial services

In fact, during the past few years, customer trust in digital payments and digital financial services has increased significantly, partly due to the need for them after the COVID-19 outbreak.

According to McKinsey & Co.'s 2023 consumer digital payments study, in-store digital payments increased from 16% to 25% in that year.

In other news, a PCI Pal study conducted in collaboration with Worldpay revealed that 90% of consumers were happy with their entire in-store digital payment experience.

The speed and streamlined checkout procedure of digital wallet solutions appealed to two-thirds of respondents in the US (63%) and the UK (68%) while almost half of UK customers (49%) said it was simpler than inputting credit card details with conventional card payment methods.

But such failures will affect customer trust, especially if they persist. Customer distrust results from a lack of trust, especially when it comes to shops who rely on outside payment processors.

David Guiver, Head of Transact & Infrastructure Products at IR, emphasizes the value of real-time transaction monitoring in reducing the impact of disruptions and enabling quicker solutions.

"No other industry is as complex as the payments industry today, so it's crucial to monitor your entire payments ecosystem in real-time," the author writes on his blog. Financial institutions are vulnerable to frequent payment failures without strict oversight, which can cause catastrophic downtime.

We handle 600 million transactions a day with our payment monitoring tool, IR Transact. Our clients say that having specially tailored alarms in place significantly speeds up the time it takes to identify and resolve issues.