Malfunction Downs Credit Card Transactions Across Israel

Long lines reported at grocery stores and gas stations as Israelis forced to use cash, checks instead.

Feb 13, 2014

Shoppers were left stranded at checkout lines Thursday morning as cash registers at the Mega and Rami Levy supermarket chains, Paz filling stations and other retailers refused to accept their credit cards.

The problem, which was corrected by the middle of the day, was traced to a malfunction at Retalix, the Israeli maker of retail software systems acquired by U.S. company NCR last year. Nevertheless, Rami Levy, who owns the discount supermarket chain named after him, estimated that the breakdown had cost his company some 1 million shekels ($284,000) in lost sales.

“It created very long lines, and many people just left their full shopping carts at the checkout counters and left when they learned they wouldn’t be able to pay by credit card,” Levy said.

An executive at another retail chain who requested anonymity said his stores tried unsuccessfully to solve the problem by approving credit card purchases offline. “We were willing to take the risk that someone was using a stolen or canceled card, but the experiment failed,” he said.

The exact cause of the problem has yet to be fully explained, but executives at Shva, the clearing company controlled by Israel’s banks, said an error setting the dollar exchange rate a zero was behind the problem.

The erroneous rate was probably entered Wednesday night, the last time data were shared between retailers, Shva and Retalix, although executives were at a loss to explain how that error blocked shekel transactions.

A credit card transaction (illustrative).Credit: Bloomberg