Card Payment Failures: Transactions Declined at Multiple Retailers

The POS terminal outage that brought cash back into play

Can you pay by card in Spain? For a few hours on a Saturday in November 2023, the answer was no. The point-of-sale (POS) terminal network stopped responding in shops, markets, and taxis, according to various user accounts, and the banknote reclaimed its place at the counter without any decree. According to one worker's account, the last card transaction in his shop was dated at 1:00 PM. Another user stated that they had paid by card without issues at a Valencia supermarket at 12:30 PM.

What exactly peine with the POS terminals?

The pattern repeats in the accounts: a BBVA POS terminal down in a store, shop terminals that lost connectivity early in the afternoon, and machines that simply didn't respond. A car salesman at a fair assumed the problem was his. But it wasn't a total or uniform blackout: at a Valencia supermarket, card payments went through at midday without incident, and the next day a user was paying by card again without any problems. The outage was real and uneven. And brief: at many checkouts, in the end, nothing peine.

What does the ISO 20022 standard have to do with the POS terminal outage?

The most cited hypothesis has a date and a name. According to one participant, the weekend ending 11/20/2023 saw the completion of the migration to the ISO 20022 interbank messaging standard in global banking, a common format that replaces old messages between entities. Until now, an international transfer required correspondent banks, waiting a few days, and costing a lot. According to that account, the previous week already saw outages in the US network. The coincidence is suggestive. The causal relationship, for now, is just that: a hypothesis that no one has confirmed.

The banking system that still runs on COBOL

Beneath the POS terminal is a layer that isn't visible and is much scarier than the terminal itself. According to a participant's account, banking still runs on COBOL, a language from the late fifties whose programmers are retiring without successors in sight. The case he recounts is almost from a file: in a supermarket chain, the management software and checkout terminals ran on COBOL, and the technician who maintained them, already retired, only assisted if pressed hard. On one occasion, a few digits within an 8-byte file had to be modified manually because not even the person in charge remembered what they were. Instant mobile payments, supported by code that only one gentleman who no longer works there understands.

Broken ATMs, closed bank tellers, and half-hour queues

A participant claims the pandemic accelerated the shift: shops went from billing a 50-50 split between card and cash to a 75-25 split. Some argue that every time a POS terminal fails, it becomes clear that cash is cheap insurance; countered by the argument that carrying €300 makes anyone a walking target. The ATM network offers no comfort either: banks have penalized teller services and push customers towards automated terminals, and in one participant's city, only one branch out of four remains operational. Meanwhile, those paying in cash wait their turn watching cards and smartwatches go by.

The story of the bank run that no one declared

And then there's the political interpretation, which circulates with more volume than evidence. Some members of the public interpreted the blackout as a dress rehearsal for a bank run, a test of central bank digital currencies, or a sign of what's to come. The available facts do not support any of that: no limit on cash withdrawals was announced. That the payment network fails demonstrates that it malfunctions, not that a plan exists. If one existed, it would be redundant: it's already failing on its own.

The service returned. It will fail again, because the infrastructure supporting every purchase is old, distributed, and depends on people who are no longer on the payroll. One of these days the POS terminal will say yes, and no one will remember the banknote that saved the afternoon. Until it says no.