Archive for Mobile

Does Your Business Take Cash?

Cashless businesses that only take contactless card payments, such as cafes and bars may be growing in number in major cities but despite their apparent convenience for their target market, they are also attracting accusations that they are discriminatory.

Cashless Bar

The BBC, for example, recently featured a story about the Crown and Anchor pub in South London which, in October, switched to fully cashless with customers only able to use debit cards, credit cards and contactless payments including Android Pay and Apple Pay.

In the case of the Crown and Anchor pub, it was reported that the decision by the parent company, London Village Inns, to make the switch to cashless was motivated by too many break-ins where the burglars were looking for cash. A positive reaction, and other cost and time-saving benefits to the change from not having to deal with (and transport) cash have meant that four of the firm’s pubs are now cashless with two more set to follow in the New Year.

Just Being Realistic?

Is it just a case of being realistic and acknowledging that we now live in a digital age where cash use is naturally in decline?

Other businesses in the UK and other countries seem to think so.  Back in September, The Boot pub in Freston near Ipswich, Suffolk switched to only accepting card or phone payments, and many bars and cafes in UK cities such as Manchester are reported to be cashless.

Travel in other countries such as Sweden and Australia can also be near cashless experiences as contactless and phone payments take over. Also, many of the ‘trendy’ New York eateries have switched to cashless, and no longer have cash registers.

Research & Stats

Research by Ikea, for example, showed that in its stores in Sweden, only 1.2 in every 1,000 people insisted on paying in cash, thereby leading to the decision that it was financially justifiable to offer them free food in the shop cafeteria instead.

The broader statistics certainly show a decline in the use of cash.  For example, UK Finance projects that in Britain cash will be used in just one fifth of all sales by 2026, and Paymentsense has reported the removal of 4,735 cash machines in the last year.

Criticism

Although there are clearly benefits for some businesses going cashless e.g. saved time, cost and hassle in dealing with cash (no cash registers and back trips), less temptation for thieves (and resulting damage to premises),  more counter space (no tills), faster transactions and turnover, plus credit card companies getting a commission for handling the payments, there are some critical voices.

What if the card payment systems suffered an outage / and or technical problems prevent payments from being taken?  Particularly in cities, this could cause considerable chaos.

Also, in New York, cashless businesses may soon face a ban with the introduction of legislation designed to protect the poor and prevent a “gentrification of the marketplace”.  It appears that cashless businesses in New York could prove to be discriminatory and exclusionary for the impoverished, homeless, under-banked, undocumented, in a city where studies have shown that nearly 12% of citizens don’t have bank accounts.

What Does This Mean For Your Business?

There’s no doubt that cashless and particularly contactless can be very convenient, fast, and beneficial for customers, business, and bank alike, when it comes to purchases of £30 and under and hence it can favour supermarkets, shops, bars and other retail and convenience outlets.

There is also a clear decline in cash itself (and ATM numbers), and an increase in the amount of debit card and contactless payments, and the use of smartphones for payments in developed economies.  We are still, however, at a point where there remains quite a lot of cash in use, and where poorer and more disadvantaged and challenged members of society, of which there are many, need to use cash and may simply not have a bank account and a card with contactless / cashless payments enabled, and therefore, may find themselves being discriminated against. Some businesses and events that deal in cash may also find it challenging and costly to convert to a cashless situation.

Cashless transactions look likely to increase in the UK, and many retail businesses may soon find themselves seriously considering whether a switch to cashless could be workable and beneficial.

02 Outage – What Happened

After last week’s major O2 4G mobile network outage which left millions of customers with no network data access has been blamed on an expired software certificate that 3rd party supplier Ericsson had installed for some customers at business-critical part of the network.

What Happened?

On Thursday last week, O2 smartphone users were unable to use their mobile phone data for 24 hours.  O2, which is owned Spanish communications company Telefonica, has the UK’s second-largest mobile network, which is part of BT, and as well as having 25 million users, it provides services for the Sky, Tesco, Giffgaff and Lycamobile networks (whose networks were also affected).  It is estimated, therefore, that the outage affected around 35 million users in the UK and other parts of Europe (and even Japan’s SoftBank).

As well as the considerable disruption and inconvenience caused to individual customers, there were knock-on disruptive effects for organisations that run connectivity services on O2’s network, including Transport for London (TfL), Shropshire Council and a number of NHS trusts. In the case of TfL, bus information display boards, part of the Countdown Systems network, stopped working at approximately 5 am. Shropshire Council reported problems with its car park payment machines, which use O2 data connections.

£Millions In Damages + Compensation Expected

The scope, severity and duration of O2’s data network outage, and the impact on the company’s reputation as well as on its users have led to reports that 02 looks likely to seek up to £100 million in damages from Ericsson.

Also, O2 has already made announcements about how it plans to compensate customers.  For example, Pay As You Go customers look set to get 10% extra when they top up their phone in the new year or 10% off when they buy data for mobile broadband devices.

Both O2 and Ericsson have apologised.  It has been reported that Telefonica’s UK chief executive Mark Evans has promised a full audit of the problem across both organisations, and Marielle Lindgren, chief executive of Ericsson UK and Ireland has said that the software that caused the issues will be decommissioned.

What Does This Mean For Your Business?

Modern businesses now rely heavily on stable and reliable broadband connections and data network services.  Any disruption to these can be very disruptive and costly to businesses with potentially disastrous consequences.  In this case, a whole day was lost, and the true cost to UK businesses  (and their customers) may be difficult to calculate. For O2 and Ericsson, the incident appears to have caused some damage to their reputations.

As several tech commentators have since pointed out, the incident has illustrated how complex IT infrastructure has become and how, despite this complexity, organisations must stay on top of matters relating to software certificates, particularly those in business-critical systems. This incident also illustrates how problems with machine identities at critical nodes can have a wide-reaching impact on business and the economy.

Some commentators have also highlighted how operators picking up more IoT traffic and the introduction of 5G could mean that businesses are likely to experience more outages of this nature in the future.  The incident with O2 may also make some businesses take another look at their mobile strategies, feel less comfortable putting all their communications through a mobile operator, and take steps to reduce their dependence on any single external point of failure.