Payments technologies may not be the magic answer to helping SMEs manage their cash flows, as a processing debacle sees Woolworths questioning the reliability of such services.
The embarrassing glitch caused a social media storm this week as customers of the supermarket giant found their accounts overdrawn or balances lower than expected, with previous transactions charged a second time.
It comes as SME owners and operators are being urged to embrace new technologies, including around payments, as a means of boosting efficiencies and tracking cash flows.
Today Woolworths issued a statement on the issue, painting itself as the victim of a processing error by its third-party payments provider.
“On Sunday, 6 August 2017, a processing error by Cuscal Limited, a financial services provider which is the payment processor for over 80 banks, credit unions and card issuers, resulted in some Woolworths Group customers who used VISA cards between 11 and 13 March 2017 being charged with transactions for a second time,” it said.
“The charges occurred as a result of the processing error by CUSCAL, a payments processor for financial institutions and card issuers. Woolworths was not involved in this error, and was completely unaware of it until we were contacted by our customers.”
Woolworths Group CEO Brad Banducci said the glitch highlights problems with the effectiveness of our financial system that have the potential to adversely affect any business.
“We are outraged on behalf of our customers that this has happened and it raises a series of important questions about the effectiveness of certain processes in the financial system,” he said.
“We have raised these concerns directly with Cuscal and Visa, and propose to pursue the matter with the relevant financial services regulators.
However, it is Woolworths that has suffered the main brand damage as a result of the incident, with Mr Banducci suggesting the company is just as much in the dark about the blunder and reparations as affected customers.
“We don’t know which of our customers have been affected because the relevant encrypted data is held only by the financial services companies,” he said.
“We want to know how this happened, and we are seeking firm commitments from the financial services providers responsible to ensure that this can never happen again.”