Telecommunications

Were you affected? Businesses may be entitled to compo over Telstra eftpos outage

Matthew Elmas /

The telecommunications industry ombudsman (TIO) says small businesses affected by a national eftpos outage late last week may be entitled to compensation amid merchant anger.

Telstra has confirmed it is conducting a “detailed investigation” into the outage that knocked out eftpos merchant machines across the country, forcing some business owners to turn away customers.

The telco, which first acknowledged the issue via Twitter last Thursday night, said the problem stemmed from faulty vendor equipment, which caused “intermittent authentication issues”.

Enraged business owners complained they had resorted to imprinting cards, while others said they had to turn customers away.


The outage has prompted the TIO to advise small businesses they may be entitled to compensation.

“Small businesses firstly need to attempt to have their issue addressed by Telstra. If the matter remains unresolved, the small business can lodge a complaint,” the TIO office said in a statement.

A Telstra spokesperson said in a statement provided to SmartCompany it discusses compensation with customers on a “case-by-case” basis.

“We place the highest priority on the reliability of the underlying connectivity used to provide the service and will explore options with our customers on how to add further resilience to the service,” the spokesperson said.

 “The disruption was caused by an issue in a supplier’s network which resulted in intermittent authentication of devices.

“Our team worked through the night on Friday to restore services. The issue was a complex one involving multiple providers across a number of locations.

 “It took time for our supplier to isolate the faulty equipment and the initial equipment restoration attempts were unsuccessful which contributed to the time taken to get devices back online. We apologise for the disruption and are conducting a detailed investigation into what occurred.”

The outage has raised new concerns about the stability of point of sale technology as the retail sector becomes more reliant on digital payments.

Earlier this year National Australia Bank pledged to compensate small businesses after an outage saw merchants unable to use eftpos on a Saturday.

Reserve Bank assistant governor Michele Bullock said in a speech earlier this year the central bank was concerned about the resilience of Australia’s payments system.

“With electronic payments becoming increasingly important, the resilience of the electronic retail payment systems is becoming quite critical to the smooth functioning of economies,” she said in June.

“Regulators are therefore starting to focus on the operational risks associated with retail payment systems and whether the operators and the participants are meeting appropriately high standards of resilience.”

Others have echoed the concern, with a spokesperson for the NSW Business Chamber suggesting a service guarantee for merchants should be considered.

“As the convenience of electronic payment becomes the default option for consumers, it’s critical that payment platforms, telecommunication providers and financial institutions have robust redundancy systems in place to ensure service continuity,” the spokesperson said.

“It’s appropriate that regulators are looking at how they can build more resilience into our payments system.

“Consideration should be given to imposing a service guarantee to merchants, with mechanisms for compensation if service is interrupted.

“At the very least, financial institutions should be looking to inform customers through text or email as soon as they become aware that a service interruption has occurred,” the spokersperson said.

NOW READ: Telecommunications “hell”: The businesses left in the lurch by Australia’s NBN fiasco

NOW READ: NAB to compensate small businesses after weekend’s nationwide outage

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Matthew Elmas

Matthew is the news editor at SmartCompany.

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