Tesco confirmed its card payment systems briefly went offline across much of the UK last weekend, causing chaos as long queues built up and staff stopped shoppers from entering the store.
Reports on social media revealed the Big 4 grocer’s contactless payment encountered technical failures in some stores, with customers resorting to old-fashioned cash at the tills.
The outages didn’t last long, but Tesco’s reliance on its IT systems has prompted a number of discussions into the benefits of moving towards “embedded finance”.
Railsbank co-founder and chief executive officer Nigel Verdon believed that the incident shows “how much of a bottleneck paying is for retailers” and how “comfortable” customers have become using the “latest payment tech”.
Verdon explained that in a just a few years card payments will feel like a “thing of the past” – in the same way that paying with cash feels antiquated to many of us now.
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“What happened to Tesco could well be a flashpoint for retailers to rid themselves of the potential for a crippling systems failure like this,” Verdon said.
The Railsbank CEO cites “embedded finance” as the next desirable move, where just “walk out” technology allows customers to grab items and go without even taking out their card.
“Consumers want speed and ease,” he explained, highlighting that embedded payments allow brands to guide the consumer experience with rewards and bonuses in order to “encourage loyalty and satisfaction”.
According to Verdon, Tesco’s blip could open valuable discussion to the future of embedded payment, with a frictionless payment system potentially leading to the “death of paying in-store, where the need to pay is removed altogether”.
He concluded: “Of course, you could see this as a minor incident which is easily forgotten. But perhaps it points to a consumer need for a new way to pay?”
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