Supermarket shoppers arriving at the checkout with a trolley full of groceries simply want to pay and get them home as quickly as possible, so the ice cream doesn’t melt. But what happens when the network that processes that payment has a meltdown?
Payments networks are invisible essentials that play a similar role in our lives to mobile phone networks, power grids, and water supplies. With them comes an “always there” expectation; but if an outage occurs, “chaos” can reign.
That was the comment from one eyewitness quoted in the media when an outage affected multiple supermarkets shortly before Christmas last year. Many other retailers have experienced the same frustration of losing sales during network outages because they couldn’t process shoppers' payments.
But what many don’t understand is that there are a number of payments networks in New Zealand – not all created equally, according to payment experts Worldline, the company that developed EFTPOS (Electronic Funds Transfer at Point Of Sale) and first rolled it out to New Zealand in the mid-1980s.
Reliability and trust are crucial considerations when it comes to retailers choosing which network to plug into and, today, Worldline processes the majority of New Zealand’s total in-store electronic or plastic card payment transactions – over 1.4 billion electronic transactions every year. They are all highly encrypted and processed at top speeds, using leading technology.
Their network is audited annually to standards set by a compliance framework used across the world by payment processors. Most significantly, Worldline’s robust payments network was 100 per cent online during the Christmas event mentioned above, providing uninterrupted payments for over 80,000 retailers
“At peak times in the shopping calendar, like Christmas, we have processed over 200 hundred transactions per second with comfortable capacity,” says Joelle Whelan, Chief Customer Operations Officer for Worldline.
“If one of the other networks goes down and retailers can’t take payments, it’s bad for them. To use the supermarket example, the trolley is often abandoned, the sale lost. There are other costs too – frozen products can’t be restocked, so they might be thrown away. Overall, there’s a cascading negative impact if electronic processing goes down.”
There is one other big casualty: trust. Whelan says retailers have a relationship with their customers courtesy of that invisible network, which is always there – until it isn’t.
The irritation of a network outage is even worse for people who rely on electronic transactions for accessing cash. According to a recent KPMG report, the five big banks closed 84 branches and 249 ATMs between 2019 and 2021. So, with fewer ATMs, more consumers today are using their retail transactions to ask for ‘cash out’ – and retailers are happy to oblige to reduce the risk of keeping cash onsite.
“At festivals and events, for example, where there’s no nearby ATM and cash is required, people will automatically turn to retailers for cash,” says Whelan.
Worldline has seen other networks suffering outages in New Zealand over the past few years. Some are caused by targeted denial of service attacks by cybercriminals. Other causes have included incorrectly implemented software changes, accidentally cut fibre optic cables, or the same kind of connectivity failure that leads to your home internet not working for a few hours.
“It might be human failure where someone connected to your ecosystem makes a change at their end which causes a failure at your end, or it could be a ransomware attack, or a hardware meltdown,” Whelan says. “It’s not the sexiest topic but providing a network that’s able to better withstand these types of challenges is vital to the retail sector and our whole economy.”
Whelan says investing in a strong network is essential for creating a resilient system less susceptible to outages, and notes that Worldline’s 100 per cent uninterrupted payment processing over the last few years is the result of that investment.
“We have connectivity into everyone who issues payment cards to consumers and the four main merchant banks who enable merchants to accept cards – and we maintain dual active processing links with many of our connected customers.
“That means if we lose one connection, traffic is automatically diverted to one of the back-up connections,” she says. “We have multiple layers of redundancy, which makes it a uniquely large and resilient network.”
It’s also necessary to ensure the network can handle not only seasonal peaks but still have capacity to balance the load – so Worldline’s current network has triple the capacity required, Whelan says. If any problems arise for retailers, Worldline has a New Zealand-based call centre available 24 hours a day, seven days a week, 365 days a year.
Two secure data centres are based in different locations and Worldline undertakes regular software updates to patch new vulnerabilities – all of which, Whelan says, adds up to a particularly reliable service for retailers.
They’ll probably need it. Kiwis spent a record-breaking $100.5 million in the 2022 Boxing Day sales, as part of a total six-week holiday spending spree that tallied up to $2.89 billion, according to Worldline data. For many retailers, that annual six-week period is peak selling season, so it’s vital to ensure they are confident in their transaction network’s performance well before the major sales start in November 2023.
“We’re the founders of EFTPOS in New Zealand, so we’ve got decades of experience in providing a safe, secure and reliable network,” says Whelan. “It’s not an overnight process to build this level of network resilience – it takes a considerable investment of time and money.
“But it’s important to us to do things properly so our merchants know that they’ve got the best possible chance of uninterrupted transactions – even at the busiest times of the year.”
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