Shoprite Check­ers rat­tled by elec­tronic trans­ac­tion prob­lems

Weekend Argus (Saturday Edition) - - NEWS - BIANCA CAPAZORIO

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.”

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