Banking app startups go TITSUP as payment slurper keels over. Again
Total Inability To Support Users' Purchases – and the second time in four months
A number of banking app startups were forced to shut down their services Thursday after their payment processor fell over for the second time in four months.
Customers of UK fintech upstarts Monzo, Revolut, Curve, Loot and Starling Bank were hit with thousands of customer complaints after their connection to the broader financial system, Global Processing Services (GPS), hit a "technical issue" and stopped working.
The outage began at around 7:00am UK time and ran until 10:00am, with the companies confirming that things were back up and running fully around 11:00am.
The outage led to a mad scramble for the companies, with most of them messaging users and telling them not to rely on their systems that morning. As the outage continued, features within the apps – such as those that allow a user to send money to another user, or pay for goods by spending on a pre-charged MasterCard – were shut down.
We’re really sorry our payment processor is experiencing issues again. We’ll update you at every step & advise you carry a spare card today!— Revolut (@RevolutApp) July 6, 2017
Although the companies did not name the company responsible, it is payment processor Global Processing Services (GPS), based in London. GPS acts as the middleman between the fintech apps affected and the MasterCard network. If GPS's systems go down, the apps are cut off from the system and no transactions can be processed.
GPS issued a statement a few hours after the systems returned, noting that a "technical issue occurred on the GPS system" that had "impacted a proportion of transactions across several of our customers and many cardholders."
It apologized for the "frustration and inconvenience caused to our customers and their cardholders," and noted that "on this occasion we have fallen short of the high standards that we have prized ourselves on." It promised to find the root cause of the problem.
However, that apology has proven insufficient for probably the most well-known company, Monzo. A similar collapse of GPS's systems in March also caused the apps to fail and resulted in Monzo announcing it was going to set up its own in-house processing system.
The company reiterated that decision on its status page on Thursday, noting: "These hiccups can happen, particularly in a new and growing business being supported by new and growing partners. However, we do not believe the level of interruption to core parts of the service that we've experienced recently are acceptable, and that is why we will be moving our card processing in-house for the current account."
Although it might be easy to blame GPS for falling over for a second time in just four months, its collapse has coincided with a number of UK online banking failures this week, raising the question over whether they are being targeted by cybercriminals.
Barclays' online services went down at the start of the week and on Wednesday we reported how Nationwide had also fallen over. Asked what the problem was, Nationwide told us: "We never release details of what has caused issues, we don't [go] into that level of detail externally." Which is helpful. ®