The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Many Bahamian small businesses suffered an “horrific” and “huge impact” from Friday’s widespread IT outage due to their reliance on card transactions for 65 percent of customer purchases.

Mark S Turnquest, the 242 Small Business Association and Resource Centre’s (SBARC) founder, told Tribune Business that many of his members and clients simply “lack the resources” to have a back-up plan to cope with events such as the shutdown of many Microsoft Office systems worldwide.

This knocked out the networks employed by many card processing firms, which left numerous small businesses unable to accept debit and credit card purchases for much of Friday. Mr Turnquest said electronic transactions now account for around two-thirds of purchases because many firms discourage cash due to the threat posed by armed robberies.

“It was horrific because many of them lost sales because they couldn’t process card sales,” he told this newspaper. “It was across the board, and a problem and challenge for them. Some of them had to bear the loss.”

Mr Turnquest revealed how one client worked out how to send digital payment links to customers via a Bahamian bank’s online platform so they “could click and pay” with card payments not available. Customers went to the store but couldn’t buy any product,” he added.

“Put it this way, they had to ask the customer are you paying in cash or are you paying by debit or credit card before they began the sales transaction. Those who were paying by card were told that the machine was down so they often left without spending anything. 

“You’re talking about 10-15 clients at each business who walked out the door. When it comes to the sales loss itself, they don’t know because they let the customer know in advance the card machine was not working,” Mr Turnquest continued.

“I can tell you one thing. It need not happen again. Small businesses, they don’t encourage the use of cash. They encourage credit card purchases to reduce the threat or robbery.” Mr Turnquest said most of his clients and members conduct two-thirds of their consumer-related transactions with credit and debit cards rather than cash.

“It was a huge impact because a lot of our clients use the 65/35 percentage split between credit and debit card payments compared to cash,” he added. “The ratio is severe. And there’s no back-up plan. What are you going to move from? It’s come inside and bring more cash, and we’re trying to discourage cash because of the robbery threat.

“The business continuity plan is to encourage customers to bring cash and credit and debit cards to their business. The problem is small businesses don’t have the type of resources to have a back-up plan. We have a problem if BPL goes down. The majority of customers I work with, retail clothing and electronic stores, they have more card sales than cash sales.”

Mr Turnquest said the use of electronic payments is only set to grow as electronic wallets and digital providers become more popular, while the Sand Dollar, the Central Bank-backed digital version of the Bahamian dollar, also expands. Friday’s woes were caused by CrowdStrike, the cyber security firm, implementing a faulty upgrade that rendered clients’ Microsoft Windows systems largely inoperable. 

Keith Roye II, Plato Alpha Design’s chief operating officer, told Tribune Business: “I think most definitely it’s a great wake-up call not only for businesses globally but businesses in The Bahamas. I believe companies, first of all, need to look at the level of access and level of control vendors have, and what is done in terms of giving persons access to their systems.”

Calling for companies to maintain a “zero trust” stance when it comes to access to their data and systems, he added that the private sector may also need to consider outsourcing IT functions if they lack the necessary in-house expertise and resources.

“It is always important, and gets even more important as your company grows and you start to service more and more customers,” Mr Roye said. “When a company starts out, you may not have the resources to hire an internal IT team.

“But as time goes on and your revenue increases, company heads must put serious thought into hiring full time competent IT staff. It is also prudent to know where your team is strong and where you may have to continue outsourcing to external service providers.

“Data security is very important,” he added “Not only that but data ownership and system control. By doing this you then limit the damage an issue like this would cause. You wouldn’t allow auto updates to all of your systems, like what happened to many companies in this case, even if they are a trusted vendor without first persons on your internal staff reviewing and verifying the update.”