Payment Processing Takes a Holiday (Imagine the Chaos)

These days, businesses take the ability to accept all types of payment—even digital ones—for granted. So, they probably don’t consider what would happen if E-Complish—and every other payment processing company, for that matter—for some reason ceased to operate for one day.

Payment Processing Takes a Holiday (Imagine the Chaos)

Almost certainly, there would be a “chain reaction,” with repercussions for businesses as well as customers. Banks, too, would very likely encounter a range of financial difficulties in the absence of debit and credit card processing capabilities.

Let’s take a deep dive here. For starters, if payment processing was to take a “holiday”, consumers would be unable to make purchases with a debit, credit, or gift card—nor would they be able to pay their bills with “plastic.” This would put a damper on business’ in-person, online and telephone sales, as well as prevent companies from collecting what could be a hefty portion of receivables from consumers who prefer to pay their bills via credit and debit rather than by check. Additionally, it would create a raft of frustrated customers, who might be so annoyed with merchants’ inability to accept credit or debit payments that they opt not to buy at all—or put off paying their bills.

Doubt the impact? Consider this: According to the Federal Reserve Bank of San Francisco’s “Diary of Consumer Payment Choice,” 28% of consumers consider debit cards their first choice of payment method, and 23% of consumers have the same feeling about credit cards.

Admittedly, without payment processing services, businesses could still accept other types of in-person payments, such as checks, cash, and money orders. However, this would be far from ideal: The likelihood of bounced checks would increase, while the value of individual sales transactions could decrease because many consumers don’t carry a lot of cash and tend to spend less money when using cash to make payments. Online businesses wouldn’t even get this far, as few have in place systems needed to process electronic checks.

In truth, brick-and-mortar merchants could still accommodate customers who lack the cash or checks needed to complete their transactions or payments by sending bills via email. However, this could lead to an entirely different raft of problems, including unpaid bills (and subsequent legal action), or more bounced checks. At the very least, businesses’ wait to receive and deposit customer payments would be longer than under other circumstances.

We do have a little history to look at here where certain individual payment processing services and payment gateways have experienced outages in the past. The list includes PayPal, which in 2009 suffered an outage that lasted 60 minutes and persisted sporadically for another few hours after it was mostly resolved. Authorize.Net and Stripe have reported outages as well. By most estimates, the PayPal outage caused merchants to lose at least $7 million. There is no data on the Authorize.Net and Stripe outages, but it is obviously large.

So, what’s our point you are probably wondering by now? Although a complete payment processing outage is unlikely, it’s quite possible that individual payment processing services will temporarily cease to function—resulting in significant loss of earnings and productivity. One key way to minimize the chances of suffering through a payment processing outage: Engaging a reliable service like E-Complish, whose redundant PCI-compliant, customized payment solutions all have top-tier security features and multi-layer fallback solutions. Not to mention, your payment processor should have multiple data centers with a written disaster recovery plan.

For more information, schedule a consultation—here.