In a recent news tidbit that brought about many smug smiles to people invested in the world of crypto, Visa Point of Sale payments throughout Europe were temporarily halted for about a day. BBC reported that many people suffered on June 1st when a “hardware failure” caused a massive Visa network blackout. Card owners were left stranded on gas stations, in restaurants, in grocery stores and even in traffic as they frantically attempted to figure out why they were unable to pay for the goods/services with their electronic money. June 1st was also a Friday, a day when most people are rushing from work to pick up groceries for the weekend, which possibly inflated this crisis even more.
Jay Curtis from Swansea had two cards declined in B&Q when he tried to pay for £240 worth of goods:
“My card just wouldn’t go through, I didn’t have cash on me so I had to drive all the way home.”
Lisa Eagleton-Muir had a similar experience, as she wasn’t able to buy any food at King’s Cross station for her return rail journey to Newcastle:
“I’ve only got two cards and they’re both Visa. I tried to buy my tea in M&S and a cafe but they were both rejected. I don’t know what I’m going to do. It’s a long journey home with no food.”
Alan White, a news editor at British Buzzfeed, had an interesting hottake on the situation:
“Wow just bought a loaf of bread with actual money, couldn’t remember what the coins were worth so threw them all at the cashier and ran out screaming #visadown”
Twitter user @Ash_Evans97, a waiter, complained on Twitter about the Visa outage bringing out the worst in his customers:
“The amount of abuse I’ve received today because of the #visadown fiasco is disgusting. I’m a waiter and I’m literally just doing the best I can, there is not a single excuse for your vile attitude towards myself, my colleagues or any server and that’s final.”
A spokesman for the supermarket chain Asda said some payments had gone through but others had not.
“When you try to pay something, it sends a message to Visa and then Visa has to send a message back to the chip and pin machine to say this is OK and then the banks are in between at some point. The message that is coming back to the chip and pin, that is where the fault is.”
Finally, the best reaction of the day came from Mastercard, Visa’s rival card company, who posted the following message on Twitter:
A Visa spokesman said the system failure had “impacted customers across Europe” and the company apologized for falling “well short” of its reliability goal. With the system handling around 150 million transactions each day, quite a few people were affected by this failure. While the PoS payments with Visa cards remained problematic throughout the day, other forms of electronic payment through Visa seemingly didn’t suffer. ATM services were soon reported to be working, which created lines in front of ATM machines and led to most of them quickly running out of cash.
The issue was solved the next day, followed by Visa coming out with a public statement and blaming the hiccup on a “hardware failure”. The company apologized and said it had no reason to believe the hardware failure was down to “any unauthorized access or malicious event”.
Granted, this caused many crypto investors to reinforce their belief in cryptocurrency. VISA is a company that runs on a centralized principle, with several on-site servers bearing the load of the network. Once one of these servers goes down, a situation like the one we experienced on June 1st happens. On the other hand, cryptocurrency networks rest on decentralized principles. Bitcoin network is held up by thousands of independent nodes placed all over the world and their number is increasing by the day. If one of these nodes were to crash, the Bitcoin network will simply divert traffic onto another active node.
This Visa crash showed us that an alternative payment system is required. While cash is an option, it can run out quickly and it’s not practical to run around with big swats of it. Cryptocurrencies are a good solution to this problem, and more retailers might consider accepting them as a payment option after the recent Visa fiasco. The issue for crypto will be finding ways to increase network throughputs as those being low can cause network crashes as well. The teams have recognized that and are working hard on implementing scaling solutions that should bring the world of crypto closer to full commercial adoption.