One of SA's largest retailers, Shoprite, has blamed Bankserv for lost revenue and the bad service its customers experienced as the national clearing system failed several times last week.
Deputy MD Carel Goosen says transactions at the company's stores were affected by system failures last week, which reached a frustrating peak on Tuesday.
Bankserv is an automated clearing house owned by the banks and provides interbank electronic transaction switching and settlement services to the sector.
Shoprite says the system failure affected all PIN-based electronic transactions, including ATM transactions. It resulted in payments being debited against consumers' accounts, but not being transferred to vendors. This left customers out of pocket and without their purchases.
The food retailer is Africa's largest and operates 1 349 stores in 17 countries across Africa, the Indian Ocean Islands and southern Asia. The retailer reported turnover of R59.319 billion for the year to June.
“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,” Goosen says.
Shoprite says “retailers' and consumers' frustration alike was further fuelled by uninformed bank staff repeatedly sending shoppers back to stores to have their problems resolved”.
To the top
Goosen says the group is lobbying the Reserve Bank in an effort to force banks to prevent future problems.
He explains that when an authorisation request is sent from the vendors to the banks through Bankserv, the bank sends an approval to the vendor. The bank then actions an authorisation against a shopper's account, after which the money is withdrawn by the banks from the account and placed in a holding account.
However, Goosen says, an intermittent malfunction in the system means the value is never transferred to the vendor. This results in an uncompleted sale and the transaction is declined.
“In the meantime many customers, while still at the checkout, receive a mobile phone text message from their bank that the transaction has been completed, but the information on the cashier's terminal advises that the transaction has been declined,” he adds.
“This past Tuesday, at 11:00, the interbank switch developed processing problems which affected all debit card transactions and some credit card transactions. Two hours later, Bankserv was still investigating a solution and retailers continued to experience random declines and timeouts throughout the week,” Goosen says.
Pick n Pay, SA's other largest retailer, says “we were fortunately not too badly affected”.
Network failure
Bankserv says banks lost connection with its card switch service for four hours last Tuesday, due to a network card failure.
The failure impacted interbank transactions, including ATM, debit and credit card authorisations at point of sale, and had the knock-on effect of impacting retailers at point of sale.
Bankserv explains customers may not have been able to complete purchases, or withdraw cash when not using their bank's ATMs.
“As soon as Bankserv became aware of the problem, the banks, as well as the relevant stakeholders, including the regulator, were immediately notified through established escalation and communication channels. The banks were requested to switch their lines to Bankserv's disaster recovery site while the problem was investigated.”
The organisation's technical support team identified a network card failure, and the card has subsequently been replaced. “Bankserv will continue to work with the regulator and the banks to ensure a high availability transaction processing environment,” it says.
Bankserv was formed in 1972 to provide interbank electronic transaction switching and settlement services to the South African banking sector and to banks in Africa. It processes more than two billion transactions worth $1 trillion a year.
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