More than seven million people are estimated to have been left unable to use their payment card due to IT hitches in the past year, according to Which?
One in seven (14%) people surveyed for the consumer group could not use their debit or credit card due to an outage in the last year – equating to 7.3 million people if the figures were projected across the UK.
Nearly half (49%) of those affected said they could not pay for goods and services at the point of sale as a result.
One in 20 (5%) experienced the problem more than once.
Some 11% of those left unable to use their card or make a payment told Which? they suffered a financial penalty as a result, the survey of more than 2,000 people found.
And 9% said their credit score was damaged because they missed a bill or payment.
Which?, which was hosting a cash summit, said the findings reinforce the need for traditional payment methods like cash to be protected.
The findings were released as trade association UK Finance announced work it is doing to support communities’ free access to cash.
Over the summer, UK Finance said it will engage with others to develop an approach for how the industry could work with local authorities to help communities to identify and report gaps in cash provision.
UK Finance will also map the range of ways consumers can access cash, such as through bank branches, the Post Office, ATMs and cashback from retailers.
Stephen Jones, chief executive of UK Finance, said: “Today the banking and finance industry is setting out a clear statement of intent and a series of practical next steps to ensure that cash will remain widely accessible and free for those that need it to help manage their finances and pay for goods and services.”
Which? said a fifth (18%) of those left unable to use their card due to an outage said they keep more cash with them and one in six (16%) have started keeping spare cash.
Separate analysis from Which? looking at Financial Conduct Authority (FCA) records of bank IT outages has 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 – and therefore been recorded more than once.
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 cashpoint closures.”
Research from trade association UK Finance found last week that one in 10 UK adults, or about 5.4 million people, now rarely use cash at all.
This is a jump of two million people compared with 2017, when 3.4 million rarely used cash.
Meanwhile, 4% of consumers mainly used cash for their spending in 2018 – equating to 1.9 million people who mainly spend using cash.
The Payment Systems Regulator (PSR) is 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.”