Small businesses: here’s what happens when online payment tools fail

Estimated read time 3 min read

Small businesses: here's what happens when online payment tools fail

While checking my morning email, I saw messages from several friends who run small businesses. They are users of Square, the online payment system, which no longer worked. Others use the Cash App service (editor’s note. a money transfer service available in the United States and Great Britain), which also broke down last Thursday afternoon, as can be seen on DownDetector.

Square has indicated that it is investigating a disruption affecting software version 6.24 on payment terminals connected via USB. The sellers concerned saw a message on their TPE indicating that the reader was disconnected. The best way to temporarily solve the failure was to switch to Bluetooth on the connectivity side.

But the fact remains that the reality of this outage is small businesses, such as food trucks, who had to tell their customers that they could not accept credit cards or electronic payments.

What to do when the TPE breaks down?

Square then recommended that users switch to offline mode. That didn’t work either. As a result, transactions that have not been recorded. The company claims, however, that “offline payments … are uploaded, but there will be a slight delay before they appear as completed. All new offline payments will be made normally”.

With regard to the Cash App application, the company has asked users not to try again to make payments or deposits for which error messages have been displayed and has indicated that users should not log out of the application. Why? We don’t know that. On X, Cash now says: “Our services have largely been restored. We are sorry if you were unable to use certain parts of the application”. Which parts? The ability to send payments and withdraw money. The main parts.

The two companies, subsidiaries of Block, say that everything is fine now. Customers tell a different story. DownDetector data shows that as of Friday morning, there were nearly 1,500 reports related to Square’s app, website and payment processing issues. Nevertheless, this is a significant decrease compared to the 18,000 reports of Thursday evening. Cash App has received nearly 1,700 reports of money transfers and other payment problems.

The exact number of affected customers and the extent of the problem remain unclear

The exact number of affected customers and the extent of the problem remain unclear. Cash App and Square have not yet responded to requests for comment on the topic. The cause of the breakdown has not yet been revealed. Neither company has yet made an official statement on this matter.

Kolton Andrus, technical director and founder of Gremlin, a company specializing in understanding software failures, said that this episode “highlights how serious the problem is”. The reliability of software remains a struggle. Why? One of the reasons is that most of the current best practices, such as SLOs (Service Level Objective) and incident response, are reactive. That is to say that they intervene only after something serious has happened. Companies need to develop strategies and best practices to proactively manage software reliability, he emphasizes.

After all, continues Mr. Andrus, “The downstream impact of outages can be serious: small businesses and small businesses that will not be able to pay their rent this month can be the catastrophic result of a software failure. We have not given enough thought to what happens downstream when a software fails”.

Square and Cash App users can tell you exactly what it is: it’s a big problem.

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