Retailers And Customers Suffer As Card Machines Give Up During Peak Hours 

Even as the ongoing cash crunch fast-tracks the adoption of digital payments, retailers claim that they are suffering due to slow speeds on card networks, which is leading to failed or slow processing of payments. On Wednesday, industry body Retailers Association of India wrote to the Indian Banks' Association about the higher number of transactions failing during peak hours, especially on weekends.

Approximately, five to seven percent of our transactions are under pressure due to machine issues, said Kumar Rajagopalan, president of the retailers' association while confirming that the industry body had reached out to the bankers' association.

Rajagopalan said that the retailers' body wants IBA to bring all stakeholders in the payments ecosystem onto a common platform to resolve the issue “as soon as possible” so that customer inconvenience and drop in sales can be minimised.

He added that the transaction failures have persisted for the last three weekends as point of sales machines declined payments during the high traffic period between 5 p.m. to 8 p.m.

This was echoed by multiple retailers that BloombergQuint reached out to.

Kishore Biyani, founder and chief executive officer of the Future Group, which runs the hypermarket chains Big Bazaar and Easy Day, said transactions were getting delayed, especially when volumes were high.

Grocery and dairy company Heritage Foods Ltd. claimed that more than 500 transactions were getting affected each weekend due to card payment issues which leave consumers dissatisfied. Dharmendra Matai, chief operating officer at Heritage Foods' retail and bakery division, said that the situation was “particularly bad” the previous weekend.

Matai added that bankers should upgrade their servers and all service providers must address the issue. IBA couldn't be reached for a comment.

These complaints come even as the government and the Reserve Bank of India are rolling out incentives for transactions through non-cash mediums amidst the shortage of currency in the economy. While the banks have fast-tracked the process of acquiring and deploying ten lakh card payment machines in the next three months, dependence on just two international giants has led to roadblocks in quick deployment and upgrade of the existing infrastructure.

Even as payment processing companies remain confident that new machines will be deployed in time, doubts persist about the strength of the existing payment infrastructure which is seeing unprecedented volumes.

Deepak Chandnani, chief executive officer in charge of South Asia and the Middle East at Worldline, which manages one-third of India's 15 lakh PoS terminals, said that observed failure rates are not unusual but accepted that there could be some “delay and slowness” in the network due to added traffic.

Chandani added that there could be an issue of confusion among the merchants as well who may be new to the system.

“Many of the merchants have just moved to card payments from their cash-based models so there could be lack of awareness on how to operate machines which could be adding to the confusion,” he said.

Meanwhile, Porush Singh, division president for South Asia at Mastercard said that he hasn't come across any reports of transaction failures from the card payment networks so far.

“We haven't seen any such thing from our end so far," Singh told BloombergQuint. "Card networks are more than geared to handle any and all volume of transactions, so there's no cause for concern about transaction failures.”