Customers turn to cash as IT issue hits card payments at major supermarkets

Customers at Morrisons and the Co-op have faced major delays and inconvenience when shopping after an IT issue at payment service provider ACI resulted in card payments failures.

The incident comes at a time when people are being encouraged not to use cash amid the Covid-19 pandemic.

ACI said it was working to fix the problem affecting the two retailers. “The current IT issues affect card payments at the Co-op and Morrisons and we are working closely with the IT teams at both partners to resolve the problem as quickly as possible,” it said.

According to the BBC, there have been long queues outside some Co-op stores since Sunday and customers have had to resort to cash payments.

The retailers said work was being carried out to fix the problems. A Morrisons spokeswoman said the supermarket chain had “experienced some technical difficulties” with card payments and was “working hard to resolve this as quickly as possible”. 

The Co-op said the problems were intermittent and “prevented a very small number of customer transactions from being processed”.

According to reports, some customers using cards have been charged twice, while others who had payments declined reported that the funds were deducted from their accounts.

The outage comes at a time when the public have never been more reliant on electronic payments. The pandemic has sparked a rapid move to digital payments, which do not require as much physical contact and potential Covid-19 transmission.

A survey carried out by the Nationwide Building Society during the first UK lockdown found that 50% of people thought they would use cash less in future, and 61% had started using other payment methods.

These include contactless payments, which, while cash payments have plummeted, have increased dramatically in the UK, accounting for 90% of all card payments in 2020. From 2019, there was a 29% increase in the use of contactless payments in UK grocery stores.

The Morrisons/Co-op outage also adds strength to calls for the future of cash to be protected.

Tom Fairbairn, distinguished engineer at payments technology company Solace, said: “Each and every retailer has a digital backbone in place that keeps operations running, and 99.9% of the time, this works smoothly in the background, connecting different systems and applications out of view.

“However, when there are complications with this, the fallout can be significant, in this case for Morrisons and the Co-op.”

Last October, the UK government set out plans to protect the future of cash to cater for the needs of certain consumers, as well as businesses, as the adoption of digital payments increases.

According to the plans, set out by HM Treasury, even though cash use is declining, with people choosing to use cards and e-wallets, physical money is still crucial for groups such as the elderly and vulnerable.

The government has also observed that many people find cash more accessible than digital payments, or that it helps them to budget and manage their finances in a way that suits them.