Friday 13th setback

FAR FROM providing customers with a sense of comfort, the assurance by the Bankers’ Association (BATT) on Monday that no cybercrime was involved in last Friday’s mass credit card glitch makes what has occurred even more disconcerting.

Scores of customers from a cross section of banks over the weekend complained of unexplained charges dated October 13, emanating from PriceSmart, the popular warehouse shopping club.

From a certain vantage point, it would be comforting if these charges, which have been partly reimbursed, were the result of some sort of deliberate targeting by cyber criminals. Instead, the company cited “a technical issue in processing, which has affected multiple banks and merchants outside PriceSmart’s control.”

Meanwhile, banks have apologised for the inconvenience caused and suggested the issue related to “the respective processing bank.” BATT said, “This is not any type of fraudulent or cyber-crime activity against customers and their banking information remains secure.”

The association added, “This reversal arose as a result of a processing issue which would have unfortunately impacted many of the banks.”

That the glitch seemingly fell within the remit of routine operations, whether at the level of the banking system or the private entity involved or both, is a woeful sign that systems are underperforming. Ahead of the yearly high-spending season, this should be a cause for concern. It shakes consumer confidence.

“You feel like your security is compromised,” one customer said. “You’re not sure who has access to your card information to charge you weeks after the fact. You’re not sure if you want to go and use your card anywhere again.”

The investigation into this matter by the Consumer Affairs Division should be supported by all stakeholders and expedited. Its outcome should, furthermore, be made known to the public. The Government also has several reasons to carefully monitor what has occurred from a policy perspective.

The timing of this unforced banking processing error is concerning given moves to wean the country off cash transactions and to transition us to an era of what are meant to be safer, digital transactions.

Only this month did Colm Imbert, the Finance Minister, announce an aggressive suit of measures to reduce the use of cash through the expanded use of online payment at state departments. The challenges to this transition, however, plainly remain substantial.

Approximately 88 per cent of businesses already do not accept digital payments. A massive 72 per cent of companies do not even have a business bank account. More than half the population do not have the knowledge to use mobile or online banking.

Friday’s incident only adds to the difficulties. Unless it is robustly addressed it could potentially set back the cashless society agenda for years to come.