Irony abounds as anti-cryptocurrency Visa admitted to the fact that over 5 million transactions failed in early June due to a backup data center not coming online due to a broken switch.
There are times when karma is very sweet. Visa, the credit card payment processor, is no fan of cryptocurrency. The company confirmed in mid-January that they will not support Bitcoin or any other virtual currencies. They have also thrown quite a bit of shade at Bitcoin, touting their vastly higher transaction numbers and speed. Yet all that crowing has come home to roost as a hardware snafu led to 5.2 million credit card transactions failing.
Payment Denied
The transaction failure for Visa occurred on June 1st, a Friday, in Europe at about the time people were getting ready to head home from work. The main country affected by the outage was the UK, with 2.4 million failed transactions, while the rest were spread throughout the EU.
The entire fiasco happened when a backup data center failed to come online. This center was designed to handle all transactions across Europe. The reason why the data center didn’t power up: a broken switch.
Charlotte Hogg, Visa’s Europe chief executive, sent a letter to the UK Treasury committee, addressing the issue. She notes that the service outage began at 2:35 pm and was not fixed until 12:45 am the next morning. As for the reason for the outage, she writes:
The incident was caused by the failure of a switch in one of Visa’s data centres. We understand what hardware malfunctioned (the switch) and the nature of the malfunction (a very rare, partial failure). We do not yet understand precisely why the switch failed at the time it did.
Unhappy Customers
Needless to say. many people were not happy having their cards declined as they sought to buy gas or groceries. It’s rather ironic that Visa touted their network reliability and speed versus that of cryptocurrencies, and yet a broken switch caused 5.2 million transaction failures. At the peak outage period, a full 35% of UK transactions were declined.
As stated above, Visa has a contentious relationship with Bitcoin and other cryptocurrencies. The credit card company originally blamed Coinbase for an error that drained accounts of the exchange’s customers back in February, but they eventually admitted that it was their fault.
Highlighting the company’s disdain for cryptocurrency is Vasant Prabhu, their chief financial officer. In an interview with the Financial Times, he expressed contempt for cryptocurrency speculators, saying that had “no clue” about what they are doing. He also trotted out the standard FUD of cryptocurrency being associated with criminals. He said:
It’s very hard to get dirty money through a banking system. Cryptocurrency is phenomenal for all that stuff . . . Every crook and every dirty politician in the world, I bet, is in cryptocurrency.
However, not all people associated with Visa are hostile to virtual currencies. The former CEO of Visa UK and Ireland, Marc O’Brien, decided to join a cryptocurrency startup called Crypterium that seeks to associate a card with an individual’s crypto wallet.
Do you find it humorous that over 5 million Visa transactions failed due to a broken switch? Let us know in the comments below.
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