It seems us Brits haven't been having much luck when it comes to banks and payment systems as of late.
As if the four+ week long TSB online banking meltdown we experienced back in late-April/Early-May wasn't bad enough, an event in which millions of customers were left unable to access their account to withdraw money to pay bills, or pay in money to cover direct debits, and which even saw some customers being granted access to other people financial details and money, it is now transpiring that the TSB has managed to break the EU's new GDPR rules, by sending out apology letters containing the personal information of the effected customers, including customer reference numbers, to the wrong addresses. Due to this latest gaff, customers who have already suffered long delays in resolving their online banking issues, have now been put at risk of their details ending up in the hands of fraudsters, who are already having a field day with the chaos that the TSB fiasco has created.
TSB aren't the first bank to suffer prolonged problems with their online banking systems. In fact, suffering online banking meltdowns seem to be somewhat of a tradition when it comes to UK banks. It is however, definitely one of the most severe.
Not wanting to be left out though, payment processor Visa decided to jump on the meltdown bandwagon yesterday afternoon, with its payment processing system suffering a UK and Europe wide service outage, which stretched on into the early hours of this morning. The outage left retailers, from small shops to large supermarkets, unable to accept card payments, rail users unable to travel, drivers unable to pay after filling up as the petrol station, and caused traffic chaos at the Severn Bridge crossing into Wales, as motorists were left unable to pay the toll to cross the bridge. At least this time, the outage was resolved within 24 hours, unlike last years outage, which lasted for three days.
Yet, despite this long history of banking meltdowns, with each passing year the country grows more and more reliant on their plastic debit cards, with Visa card payments now accounting for every £1 in £3 spent in the UK.
Now, I have nothing against the humble debit card in principle. It's a convenient method of payment, and thanks to chip and pin technology, it was reasonably secure, although sadly the advent of contactless payments (which have more flaws than you can shake a stick at), have put an end to that, even for those of us who had opted out of having contactless technology in our cards. Despite this though, I, like many others still use my debit card heavily. I also use online banking frequently too (although I still make sure to frequent my local branch on a regular basis, as if you don't use it, you lose it).
I am not therefore, going to start declaring that people should stop using these systems entirely, as they are a important and vital part of modern day life, especially as banks close more and more of their local branches. However, with that being said, these most recent problems do highlight the dangers of becoming overly reliant on these systems for our day to day life.
For those reading this, I want you to ask yourself these questions. How much physical cash do you typically carry in your wallet alongside your debit and/or credit cards? If you were out at work, or doing the shopping, and the Visa, Mastercard, or American Express payments systems were to go down, would you have enough to still be able to pay for your shopping? If you needed to fill the car up with fuel to be able to get home, or pay for a bus, train, or taxi, would you have enough cash on you to do so?
Now ask yourself this. How much physical cash do you have at home? If the banking systems were to go down, and you couldn't access your account, do you have enough that you'd be able to pay your bills, rent and council tax in cash at the Post Office, and buy groceries using cash, while you wait for the bankers to stop swimming in their bonus payments like Scrooge McDuck, and get things fixed?
If the answer is no, then I would strongly advise you to:
Start carrying some emergency cash in your wallet. It doesn't have to be much, but at the very least, it should be enough to cover the cost of getting yourself home (be that via paying to use public transport, or filling the car up with enough fuel and/or paying tolls), and;
Establish an emergency fund. £1000 (or $1000, or the equivalent in your local currency) should be the bare minimum amount to aim for, and you should seek to hold this in a mixture of denominations (IE: £100 in £5's, £300 in £10's, £300 in £20's and £300 in £50's). You don't want it all in small denominations, as this will take up a lot of space. Likewise though, you don't want it all stored in higher value denominations, as this would be impractical for smaller transactions. If you can save more, then that's great! But at the very least, £1000 (or $1000) should be your minimum goal, even if you are only able to get there by saving £50/month.
If you can accomplish these two small goals, then you'll be a lot more prepared to deal with service outages than the average person. You'll also be a lot more financially secure than many others are too.
If possible, I'd also suggest going even further, and continuing to save money into a separate savings fund, until you have enough saved to cover between three to six months worth of household expenses. If you can achieve this, then not only would you be fully protected from a short-term banking system failure, but you'd also have some form of protection from sudden job loss too. Although, when you start getting to this level of savings, you may want to start looking at alternate means of holding it which, while still outside of the banking sector, provide you with some protection against the effects of inflation (but that's a subject for another time).
Just remember though, no matter how far we travel down the road to becoming a cashless society, as long as cash still exists, the old adage will always remain true: Cash. Is. King. And your should NEVER be without it.
