For businesses of all sizes, credit card payments are essential. And when credit card processing outages occur, the revenue loss can be huge.
So much so that, according to Payments Dive, payment outages cost businesses $44 billion a year, with outages lasting about two hours on average. Even more problematic?
Nearly two-thirds of those outages take place during peak hours, when lines are long and every minute counts. Very few customers will wait for credit card issues to be resolved. More often than not, shoppers will leave if they can’t pay quickly and move on. That’s why having backup payment options and a clear plan in place isn’t optional. It’s part of running a resilient business.
What causes credit card outages?
While major outages are rare today, they often stem from failures in legacy, on-premise infrastructure. Modern processors leverage cloud-based architecture and geographically diverse data centers to build redundancy into their systems, ensuring that a localized power or weather event does not trigger a national outage.
Using outdated payment terminals and systems can also lead to issues, which is why it’s essential to choose the best payment terminals and ensure that they are supported by your processor. Though rare, these outages could happen at any time, and reliance on outdated hardware and software puts businesses at risk of lost revenue.
In an increasingly cashless world, it is a huge problem for businesses when credit card processing outages occur. All businesses must be aware of the possibility of an outage and have a plan in place to maintain business continuity and transaction processing capabilities in such an event.
What to do during credit card processing outages
Disruptions in card processing are stressful for everyone involved. When an outage takes place, there are a few crucial steps the business should take to troubleshoot and communicate the issue.
Determine the cause
Since payment processing outages are infrequent, the first step for any business experiencing issues with processing payment should be determining the root cause. Checking to see if there is an issue with the internet service provider is a good first step to diagnose the disruption.
Wireless internet outages cause connectivity issues and can be easily remedied with a backup solution, such as a DSL or hard-wired internet connection. Since most businesses use WiFi to operate their point-of-sale terminals, this is the best place to start when an issue occurs.
If the issue is local connectivity, the terminal should have automatic failover. Modern payment terminals (including those offered by Stax) come equipped with dual-connectivity (WiFi and cellular/4G) so that if the primary WiFi connection fails, the terminal automatically switches to cellular data, ensuring transactions continue without staff intervention. It’s worth providing your staff instructions on WiFi router troubleshooting so they can check that immediately when they cannot process credit card transactions at the card reader.
In some cases, the internet service providers experience disruption, and the problem goes beyond the WiFi. Some mobile POS systems, including those offered by Stax, are able to connect to cellular data instead of WiFi. With a variety of technology available for businesses, it is important to know what type of connectivity devices have, because not all mobile devices are enabled with the ability to connect to cellular data.
If the internet is not the issue, the next thing businesses should do is check the physical terminals to ensure they are functional. Malfunctioning payment terminals are dealt with by working with the payment processor, and assuming there is a backup method or additional terminal in place to accept payments, there should be little disruption to the business.
When troubleshooting, remember that credit card outages (Visa/Mastercard) are often different from debit network outages (Pulse/Star). Your processor may be able to route credit transactions while the debit network is down (or vice versa), which helps isolate the cause.
Monitor the processor’s status page
While consumer tools like Down Detector are helpful, always check your payment processor’s official status dashboard or API status page first. This provides the most accurate, real-time information regarding system health. Down Detector is a helpful resource with real-time notifications that report if an issue is widespread with an internet service provider, payment processing company, or even specific credit card companies such as Visa or Mastercard. Checking to see if the problem is isolated to ISPs, financial institutions, payment processors, or card issuers is an important part of the process when experiencing a credit card outage.
Accept alternative payment methods
Explore accepting true alternative payment rails, such as ACH/bank transfers (if supported by your platform) or consumer-based peer-to-peer apps like Zelle and Venmo. Note: Card-based mobile payments (Apple Pay, Google Pay) use the same underlying card networks; if the network is the cause of the outage, these will also be affected.
Just note that these options may require a functioning internet or mobile connection, so ensure you have a reliable network available.
Consider manual processing (imprinting)
Be aware this is extremely high-risk. You must contact your processor first to ensure your merchant agreement permits unauthorized manual transactions. If processed, you assume 100% liability for any fraud or decline, as the transaction was not authorized in real-time.
If you do decide to implement manual processing, keep a log of all affected transactions during the outage, including the date, time, customer details, and transaction amounts. This record will help reconcile the transactions once the credit card processor is functioning again.
Once service is restored, the processor’s system automatically handles recovery. If the outage persists, the final action involves the processor manually submitting the day’s batch file (all stored, authorized transactions) to the acquiring bank for final clearing and settlement.
Communication is key
If the card processing issue is not caused by internet connectivity, power supply, or physical terminals, it is likely an issue with the card processing company. When this is the case, the first call should be to customer support to determine the cause and expected time for a fix.
It is also crucial for businesses to communicate with their customers when there is an outage. For this, social media announcements are a key way to reach customers.
Though businesses may be reluctant to turn to social media to announce something as unpleasant as their inability to process debit and credit card payments, proactive and transparent communication can resolve many of the customer service complaints.
Providing updates and communicating with customers during an outage goes a long way in ensuring the company is not to blame. Frustrated customers often share their experience on social media before news reports come out.
Providing transparent communication as soon as an issue is known will help alleviate some of the concern and shows a commitment to resolving it.
Double-up on exceptional customer service
While great customer service should be present in all circumstances, it’s doubly important to provide exceptional customer support during the outage.
So, prioritize customer service and handle any inconveniences with empathy. Offer assistance, answer questions, and address concerns promptly. Keeping your customers informed and satisfied can help mitigate the impact of the outage on your business reputation.
Credit card alternatives (in-store and online)
The most obvious alternative to a payment card is a cash transaction, but when that is not an option for the customer, there are some other options.
Provide multiple payment gateways online
Nowadays, it is increasingly common to offer multiple payment gateways for ecommerce transactions. Many retailers offer multiple payment options such as PayPal, Amazon Pay, Google Pay, Apple Pay, and more.
Doing so gives options to the customer and allows them to select the method they feel is more convenient. The added benefit of offering multiple payment gateways is if one experiences an outage, there are alternative options for a customer to choose from.
The benefits of backup processing for in-person transactions
Stax offers offline processing with our mobile app and terminals, which securely stores transaction data when internet connectivity fails. However, merchants must ensure the device has battery power and that transactions are submitted immediately once connection is restored to maintain the authorization guarantee. When power and/or the internet isn’t functional, Stax has credit card machines that can connect to cellular data, allowing transactions to process normally, collecting credit card information with no interruption.
Mobile devices not only provide an option to support offline transactions, but they can also be a huge customer service enhancement during busy shopping seasons. Mobile POS systems are a great solution for large and small businesses and can easily be deployed across multiple locations.
Between the convenient checkout experience and backup processing abilities available with mobile POS, this solution is worth considering. Stax’s mobile payment solutions are easily integrated with online and stationary POS systems.
Further, integrations between POS systems and ecommerce sites allow customers to place an order online if there are issues at a physical location (and vice versa). In the event of an outage, having multiple options available may just save the day and provide a more seamless customer experience.
Choosing a payment provider that has backup processing, multiple payment options and integrations, reliable technology, and exceptional customer service allows your business to function smoothly, even when things go awry.
Quick FAQs about credit card processing outages
Q: What are the common causes of credit card processing outages?
Credit card processing outages can be caused by widespread power outages, internet service disruptions, and technology failures. Other factors include outdated payment terminals and systems, as well as issues with the payment processor itself.
Q: How do power outages impact credit card processing?
Power outages can disrupt the operations of payment processors and terminals, leading to an inability to process transactions. Businesses should have backup power solutions in place to mitigate these disruptions.
Q: What steps should businesses take during a credit card processing outage?
First, determine the root cause of the outage by checking internet connectivity and the functionality of payment terminals. Check your payment processor’s status dashboard, or use resources like Down Detector to see if the issue is widespread. Communicate with the payment processor, and provide updates to customers through social media.
Q: How can businesses troubleshoot internet-related payment processing issues?
Start by checking the WiFi connection and reconnecting point-of-sale terminals to the internet. If the problem persists, check with the internet service provider. Having a backup internet solution, such as a DSL or hard-wired connection, can help maintain connectivity.
Q: What alternative payment methods can businesses offer during an outage?
Businesses can accept mobile payment apps like Apple Pay and Google Pay, peer-to-peer payments like Zelle and Venmo, and manual credit card imprinters for offline processing. Ensure you have a reliable network to support these methods.
Q: How important is communication during a credit card processing outage?
Communication is crucial. Inform customers about the outage and the steps being taken to resolve it via social media and other communication channels. Transparent communication can help mitigate customer frustration and maintain trust.
Q: What are some benefits of having backup processing solutions?
Backup processing solutions, such as mobile POS systems that connect to cellular data, allow businesses to continue processing transactions even during power or internet outages. These solutions also enhance customer service during busy periods.
Q: How can businesses prepare for potential credit card processing outages?
Businesses should choose reliable payment providers, use up-to-date terminals, have backup internet and power solutions, and train staff to handle outages. Additionally, offering multiple payment gateways for online transactions can provide customers with more options.
Q: Why is it important to have multiple payment gateways for ecommerce transactions?
Multiple payment gateways ensure that if one payment method experiences an outage, customers can still complete their transactions using an alternative method. This reduces the risk of lost sales and improves the overall customer experience.
Q: What role does exceptional customer service play during a credit card processing outage?
Providing exceptional customer service during an outage is essential. Address customer concerns promptly, offer assistance, and keep them informed. This can help maintain customer satisfaction and protect the business’s reputation.
