Global IT outage proves importance of cash says Volumatic
29 July 2024
The cash versus digital currency debate has raged on for years, with supporters on both sides defending their corner, but an unexpected occurrence last week provided a timely reminder of both the downside of digital systems and the importance of cash, as a major IT outage caused havoc across the globe.
On Friday 19 April, computer systems around the world were paralysed by an update to their Microsoft operating systems by cybersecurity firm Crowdstrike, which affected tens of millions of computers within businesses, including supermarkets, retail stores, restaurants, broadcasters, hospitals, doctors surgeries, train stations, airports and even some banks. Although many problems caused by the outage were sorted within 24 hours, other issues are expected to take weeks to resolve.
Now being called the ‘largest global tech outage in history’, this latest digital failure made credit and debit payments unavailable for most of the day, meaning that many businesses, particularly those who chose to go cashless following the pandemic, were forced to close their doors or suspend their services, causing misery and mayhem for their customers and huge losses in revenue, at a time when businesses are still struggling to survive with the on-going cost-of-living crisis.
Meanwhile, those businesses that still accept cash payments were able to stay open and keep trading, taking cash and issuing handwritten receipts, with their customers grateful that they could still purchase what they needed to, proving that maintaining cash and continuing to offer payment choice to consumers is vitally important to keeping businesses - and the economy - growing.
Industry reaction
Following the outage, financial experts in the UK have urged the British public to continue using cash, reminding them that “cash is not dead" and that it remains useful as these errors start to become more commonplace.
Our reliance and dependence on the technology required to manage, run and maintain in-store systems is part of everyday life for billions around the world. But when it fails, as last Friday proved, the fallout can be catastrophic. According to some experts, it is not a question of “if” a failure of this magnitude will happen again, but “when” it will happen.
The Payment Choice Alliance (PCA), which campaigns against the move towards a cashless society says cash provides essential fallback when digital payments break down. “There will always be outages,” said Ron Delnevo, the PCA’s Chairman. “But if there is no alternative, then the whole thing can collapse around you.”
This sentiment was echoed by UK Finance, the trade association for the UK banking and financial services sector, who insist there is “definitely still a place” for cash. According to their research, cash payments increased for the first time in a decade last year. “It’s up to individual businesses, but we think it’s good to give people a choice. Most businesses still do offer cash.”
The GMB Union also commented last week, with Eamon O’Hearn, GMB National Officer, saying: “The IT outage reinforces what GMB has been saying for years - cash is a vital part of how our communities operate.”
“When you take cash out of the system, it means people have nothing to fall back on, impacting on how they do the everyday basics - even buying food. Today needs to be the start of a new conversation at a local and national level of how we keep cash in our society.”
Keeping cash in our society was a point raised in a new report in June by the Financial Inclusion Commission (FIC). They called for the new government (prior to the General Election) to protect both cash and people’s access to cash – and not just as a back-up, but to help those who want to spend cash, rely on cash and continue to need cash.
And while it remains to be seen what new legislation is brought in by new Prime Minister Sir Kier Starmer, it’s widely felt now that the UK should introduce a new law ensuring that cash can always be used to protect us, not only from big tech failures and external threats but also big-brother type surveillance, seeing as cash also has the benefit of not requiring personal data to be shared.
How cash handling can help
One of the stumbling blocks for accepting cash in retailers’ minds is the inaccurate perception of it being both expensive and difficult to process – when nothing could be further from the truth.
These days, cash processing can be done quickly and simply with the help of intelligent cash handling solutions such as the Volumatic CCi, making manual counting and checking a thing of the past.
The CCi sits at POS and verifies, counts and securely stores your banknotes. This all-in-one device means notes are only touched once, minimising theft and shrinkage, and together with our CashView Enterprise cash management software, which facilitates automated reconciliation and access to third-party provider apps including your CiT provider and your bank, it can offer a true end-to-end cash management solution at minimal cost and with an enviable ROI.
Mike Severs, Sales & Marketing Director at Volumatic said: “Cash should not be seen as the enemy. This latest – and very serious - IT outage proves that cash is still a vital method of payment and is always resilient, and also proves that moving towards a fully digital payment system could be disastrous.”
“We’re pro-payment choice and while we understand that most people enjoy the convenience of tapping a card or a phone to make a payment, when it doesn’t work, consumers are left scrambling and unable to access their own money. Businesses must understand that they need to offer another way to pay to protect themselves and their customers, and with cash handling technology, accepting cash is both easy and effortless.”
Research from the British Retail Consortium (BRC) last year showed that we are now seeing a return to many of the pre-pandemic trends in payments, including the return of smaller but more frequent cash payments, particularly from those using cash to help them budget. The public are once again realising that cash is more important than ever, so businesses must too.