Retailers hit by RBS card failure

The Payments Council said recently that approximately 12% of Christmas shopping in December is expected to be conducted online using plastic cards, highlighting just how significant Monday's RBS group card problems might be for the retail industry.

With many industry commentators predicting that Monday was going to be the busiest online shopping day of 2013, it is clear the technology fault encountered at RBS, which meant that some customers couldn't make transactions or withdraw money, will have left a number of retailers with fewer completed sales than expected.

Social media was first to report the problems, with the issues coming to a head on Twitter around 18:30 – one of the peak times for online shopping. Technological faults appeared to last for a number of hours, with some customers even complaining of money going missing from their accounts.

Visa Europe had released estimates last week, suggesting that £312,500 was set to be spent online every minute on Monday, or £5,208 per second. These figures may well have been disrupted by the outage.

Understandably, given the close relationships retailers have with the banks, the businesses Essential Retail spoke to did not want their comments made public, but it is clear that many of the industry's players are not happy with the IT glitch.

RBS CEO Ross McEwan acknowledged how important a day it was for UK retail in a statement released this week, calling Monday's night's failure "unacceptable" and understanding that people were "let down" on what was predicted to be such a busy day for eCommerce.

McEwan added: "For decades, RBS failed to invest properly in its systems. We need to put our customers' needs at the centre of all we do. It will take time, but we are investing heavily in building IT systems our customers can rely on.

"I'm sorry for the inconvenience we caused our customers. We know we have to do better."

It is difficult to put a figure on the overall cost to UK retail, but Payments Council research saying £34 billion and £14 billion in sales will be completed on debit and credit cards respectively in December puts into context the importance of card transactions to the retail industry.

With the recent signs that the sector is recovering after a number of austere years and cautious consumer spending activity, obstacles in the payment process for customers will not be welcome.

British Retail Consortium (BRC) figures show that more than half of transactions made in 2012 were conducted with cash, but cards are still expected to play a prominent role the retail transaction process, with debit card usage up 3.2% in 2012 and online retail continuing to grow in importance. Indeed, the BRC-KPMG online sales index, published this week, showed that online sales of non-food products in the UK grew 16% year on year in November.

Commenting on the impact of the RBS card glitch, a BRC spokesperson told Essential Retail: "We understand there are reports of problems with some transaction systems and we sympathise with anyone if they have been affected.

"With shopping online becoming increasingly prominent, it is important that customers have access to reliable methods of paying for their purchases."

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