FinTech News

Could Europe’s Visa Outage Setback the Cashless Movement?

At the end of last week, a major Visa network outage affected the United Kingdom as well as other parts of Europe. As Axios reports, this dealt a big blow to the U.K. as Visa currently accounts for about one-third of all spending. While things seem to be back to normal now — with the outage being blamed on a hardware failure — the disruption now has some questioning whether consumers are really ready for the cashless future some have been pushing towards.

Anecdotes from the outage truly show how reliant many of us have become on plastic and other non-cash forms of payment. A quick Twitter search turns up stories of travelers stuck at train stations unable to purchase tickets, diners left embarrassed after their cards were declined at restaurants, and even some ATMs running out of cash as demand for cash spiked. However, in a bright spot of news, the Guardian reports that some contactless payments were still available despite chip and pin transactions intermittently being down.

Issues like the one seen in Europe may be why less than half of Americans surveyed could foresee the country going cashless in their lifetime. Despite those skeptics, some countries actually are on their way to being cashless, as Forbes points out. For example, in Sweden, cash currently accounts for less than one-fifth of all payments while the global average is closer to 75%.

Of course, while some have taken the Visa outage to show the dangers of relying on technology, others suggest this is the perfect opportunity to talk about emerging technologies — namely cryptocurrencies. Among those making this argument is the site The Daily Hodl. Pointing to Visa’s hardware failure explanation, the site writes, “The issues highlight the strengths of Bitcoin and blockchain, whose decentralized networks are designed to stay online without reliance on any one piece of hardware. Bitcoin has effectively remained online since its inception in 2009.” The site goes on to note that Visa themselves have been experimenting with blockchain technology to help facilitate international B2B transactions.

While there may be a few takeaways from Visa’s recent outage in Europe — and surely some of those affected will be carrying a few extra Euros or Pounds in their wallet from now on — it’s likely hyperbolic to declare that this single incident could derail any momentum a cashless movement is experiencing. If anything, as crypto enthusiasts have pointed out, the incident does highlight the need for better technologies, not less tech all around. Admittedly cryptocurrencies might not be the perfect solution in this case either, but hopefully the next big thing in payments is just around the corner. Maybe once that perfect FinTech solution arrives, Sweden and other countries can continue marching forward to a cashless society.

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