Out-Law / Your Daily Need-To-Know

Worldpay provides more detail on payment settlement issues

Out-Law News | 20 Jul 2016 | 1:30 pm | 1 min. read

Problems with Worldpay's payments processing affect "substantially less than 1%" of the company's customers, the payments processor has said.

Worldpay first reported problems with some transactions it was processing on behalf of customers on 7 July. In a new statement the company has admitted that settlement issues remain unresolved.

"Worldpay is experiencing an isolated issue with one of its gateways which is affecting a very small proportion of our customers (substantially less than 1%) and a small proportion of the transactions that we process daily," a Worldpay spokesperson said. "This has resulted in a delay to settlement across some of these customers' platforms."

"Authorisations are processing normally. However, efforts to resolve the issues causing settlement delays are on-going. We are taking steps to implement changes, with further testing already underway, with the aim of restoring normal operational service as soon as possible, and have proactively communicated with all affected customers. We sincerely apologise for the inconvenience this has caused," the spokesperson said.

According to a report by the Financial Times the technical problems have affected millions of transactions and prevented consumers from receiving money from some online businesses. Gambling operator Stan James and e-commerce platform Etsy are among the businesses impacted, the report said.

The Financial Times said one gambling business had reported the payments problems to the Financial Conduct Authority (FCA). The regulator told Out-Law.com that it had no statement to make on the issue.

Expert in financial services and technology Angus McFadyen of Pinsent Masons, the law firm behind Out-Law.com, said: "Regulatory obligations are not specific around this. That said, the FCA may well question the suitability of resiliency measures – as was the case with the banks that have suffered outages."

McFadyen said Worldpay is unlikely to face contractual claims from customers affected by the payment settlement issues.

"Contractual redress is likely to be negligible – there’s an inconvenience factor and also a lost business factor but funds 'in-flight' should not be affected," he said. "Worldpay would typically contractually exclude liability for these other losses."