Shoprite Checkers rattled by electronic transaction problems
A COMPANY responsible for electronic banking transactions has left Shoprite Checkers fuming after a serious hardware problem meant the retail chain was unable to process thousands of transactions throughout the week.
Shoprite Checkers issued a statement this week about its problems with the Bankserv system on Tuesday, when systems were down for two hours.
Further problems were experienced intermittently throughout the week. The system failure resulted in all pin-based electronic fund transactions, including ATM withdrawals, being affected.
It meant that even though shoppers’ bank accounts were debited, the stores did not receive the money, and so shoppers could not leave the store with their purchases.
Shoprite Checkers said in a statement: “Retailers and consumers’ frustration alike was further fuelled by uninformed bank staff repeatedly sending shoppers back to stores to have their problems resolved.”
Shoprite Group deputy managing director Carel Goosen said: “This past Tuesday at 11am the interbank switch developed processing problems which affected all debit-card transactions and some credit-card transactions.
“Two hours later Bankserv was still investigating the prob- lem and retailers continued to experience random declines and time-outs throughout the week.”
He said Bankserv was an automated clearing house owned by the banks, which provided interbank electronic transaction switching and settlement services.
“When the store sends an authorisation request to the banks via Bankserv, the bank sends an approval to the store and puts an authorisation against the shopper’s account. Then the bank withdraws the money from the shopper’s account and puts it into a holding account.
“An intermittent malfunction affects this process. It means while the money is withdrawn from the shopper’s account it does not get sent to the vendor, and this means an incomplete sale. As a result the transaction is declined.
“Meanwhile the shopper, still waiting at the check-out, gets an SMS from their bank to say the transaction has been completed.”
In its statement, Shoprite said it had had problems with Bankserv for years and has taken the problem to the Reserve Bank as it had not been resolved.
Brad Gillis, head of the business division at Bankserv, said the problem had started on Tuesday and had been narrowed down to a hardware problem.
“The offending piece of hardware” had been removed and systems would be completely stable again by today, he said.
Gillis said he didn’t know what other problems Shoprite was referring to in the fouryear period, as the last outage they had experienced was “for two hours in 2004, which was five years ago”.
Asked whether the shoppers whose accounts had been debited had since been refunded, Gillis said: “I can’t tell you the answer to that.”
He said his company did not deal with consumers, and it was up to the banks to provide refunds.
“They must initiate that process with the issuing bank, the bank which issued the card. We would not be able to intervene there.”
When a problem such as this one is experienced, notification was sent to the Payments Association of South Africa, which in turn notified the banks, Gillis said.
Goosen said: “While retailers obviously lose turnover when this happens, the real issue for the Shoprite Group is the detrimental effect Bankserv’s system failures have on the supermarket group’s service levels.”