Centralized Provider Problem Causes Nationwide Digital Payment Meltdown in Spain: Users Turn to Crypto and Cash
A problem with Redsys, a third-party platform used in all of Spain, caused a meltdown for almost all of the digital payment options in the country, leaving citizens without means of payment for hours. The incident left stores without the possibility of using credit and debit cards for receiving payments, and users had to turn to cash and other options like crypto.
Redsys Problems Cause Nationwide Payment Meltdown in Spain
A still undisclosed problem in one of the main payment providers in Spain has caused a nationwide disruption in the payment networks in the country, leaving stores and e-commerce without means for accepting digital payments.
The incident, referred to by the company as “last-minute payment service degradations, exclusively linked to internal communication lines,” which occurred on November 18, affected the credit and debit card networks of Visa and Mastercard, ATMs, and other online payment methods, leaving businesses unable to process payments for a few hours.
Redsys provides payment intermediation services for more than 60 banks and other institutions after its fusion with Iberpay and Cecabank in 2019, a movement directed to cut costs and improve interoperability. However, this concentrated all digital payment users under one platform, amplifying the impact of the situation.
Effects and Reactions
Spaniards affected by this problem used social networks to explain how they dealt with the situation. Some criticized the posture of progressive cash elimination in the country, with the forced reduction of cash payments to a maximum of 1,000 euros per payment, a measure that was called out explicitly by the European Central Bank as an endangerment of the concept of legal tender.
X user Luis Salvatierra said he had no cash and had to turn to crypto to pay for a meal. He stated:
The national Redsys network has gone down while I was in line to eat at IKEA without having any cash, I was able to buy a gift card with Bitrefill and Phoenix Wallet. I can eat now.
Some emphasized the need to carry cash as a failsafe in case one of these disruptions occurs again. However, others had to stop their purchases due to the impossibility of making payments with the tools available.
Cash is still one of the primary payment methods used in Spain, with 65% of people using it daily, even with a significant reduction in the ATMs available in the country.
What do you think about the reduction of cash usage in favor of digital payment alternatives? Tell us in the comments section below.
