More than seven million people were left unable to use their payment cards due to IT hitches in the past year, according to estimates by consumer group Which?
One in seven – 14% of the 2,000 people – surveyed by the group could not use their debit or credit card due to an outage in the past year – equating to 7.3 million people if the figures were projected across the UK.
Nearly half of those affected said they could not pay for goods and services at the point of sale as a result.
Up to 5% experienced the problem more than once.
Around 11% of those left unable to use their card or make a payment told Which? they suffered a financial penalty as a result and 9% said their credit score was damaged because they missed a bill or payment.
Which? said 18% of those left unable to use their card due to an outage said they keep more cash with them.
Separate analysis from Which? looking at Financial Conduct Authority (FCA) records of bank IT outages found there were 362 incidents reported by UK banks in the 12 months to the end of March.
Some of these incidents may have caused disruptions at more than one bank, meaning they could have been recorded more than once.
Which?, which was hosting a cash summit, said the findings reinforced the need for traditional payment methods like cash to be protected.
The vulnerability of card users comes at a time when the medium is quickly rising as the payment methods of choice.
According to research released last week by UK Finance, the trade association for the UK banking and financial services sector, 10% of the adult population – around 5.4 million people – made either one or no cash payments per month in 2018.
The organisation said this marked a jump of two million people compared with 2017, when 3.4 million hardly used cash.
UK Finance said it would examine the range of ways consumers can access cash, such as through bank branches, the Post Office, ATMs and cashback from retailers.
Gareth Shaw, head of money at Which?, said: “Digital payments have enhanced many people’s lives – but many still rely on cash and all of us risk being shut out of paying for goods and services when technology lets us down.
“Meanwhile, people across the UK risk being stripped of their ability to access cash through the double blow of widespread bank branch and cash point closures.”
The Payment Systems Regulator (PSR) is also looking into cash access across the UK, including working to understand people’s needs and considering the different ways people can access physical money.
Federation of Small Businesses (FSB) policy and advocacy chairman Martin McTague said: “Cash remains a vital back-up for when payment card systems fail.”
He continued: “Action is needed on two fronts. First off, we have to improve the resilience and reach of our digital payments infrastructure in the UK – that includes country-wide access to reliable broadband.
“Second, we need to maintain our cash infrastructure for as long as people want and need it.”
Caroline Wayman, chief executive of the Financial Ombudsman Service (FOS), said: “Last year the Financial Ombudsman Service saw a large increase in current account complaints and high-profile IT banking failures were a large part of it.
“In some cases we found that banks hadn’t done enough to make up for the impact that IT failures can have on customers.”