Cash is needed: due to power outages, Ukrainians cannot pay with cards in stores

Due to power outages, Ukrainians are finding it increasingly difficult to use banking services, despite assurances from financiers and the National Bank of Ukraine. The main problem at the moment is non-functioning payment terminals (POS terminals) in stores, which prevent people from paying for goods with bank cards. Cash is being demanded at the registers.

The issue is that many retail chains have connected their POS terminals not to a stationary internet connection, which continues to work when the store switches to generators during power outages, but to mobile internet. This leads to problems because, in most cases, mobile communication quickly disappears after power outages due to the power being cut off from the operators’ stations.

Back in 2023, representatives of Kyivstar, Vodafone, and Life promised to equip their relay stations with generators and ensure coverage during outages, but this has not been done universally. Even in places where generators have been installed, they are not always refueled. As a result, in most cases, when outages occur, subscribers almost immediately lose mobile communication, and so do merchants.

“You have to understand that there will be communication interruptions due to the power outages at the stations; this is not our fault but the energy sector’s,” commented Alexander, a manager at Kyivstar.

Banks are also not ready to take on additional responsibility.

“This is not our problem. Our POS terminals are operational, and we process all incoming transactions – we ensure payments are made. There is a communication issue, but we don’t solve it. We have always recommended that retail points have alternative (backup) communication channels to ensure payments. This is their task,” said PrivatBank.

As a result, people are unable to pay for purchases with a card and are forced to withdraw cash, paying a standard commission of 1% of the amount.

The second banking problem caused by outages affects the operation of branches. Specifically, non-operational bank branches where people cannot receive financial services. Not all cash desks are equipped with generators and additional communication channels (for making payments).

“Individual entrepreneurs work on diesel generators, the ‘Rozetka’ store nearby works, but Oschadbank is closed – ‘no power’,” reads a complaint by Igor Zhuk from Kyiv on one of the financial websites. The resident reported that the Oschadbank branch No. 160 on 24-A Peremohy Ave. in Kyiv is not operating.

Back in 2023, the National Bank announced that the problem with unpowered banks was being solved through the creation of the Power Banking network. The NBU required financiers to purchase generators, Starlink stations, and ensure the operation of a certain number of branches even in the absence of power in the network. The state regulator regularly compiles lists of so-called “energy-independent branches” and publishes them on its website as part of the Power Banking project (power.bank.gov.ua).

However, firstly, at best, every second bank branch is energy-independent. The NBU claims that Power Banking includes 2,390 bank branches, while according to official reports, as of April 1, 2024, there were 5,108 branches in Ukraine. Secondly, not all bank branches on the list of energy-independent branches actually operate during outages, despite promises to the regulator.

“The main problem is the generators, which have become harder to service and refuel. Some servicing companies have ceased operations and are terminating contracts, citing the mobilization of key workers. This is happening not only in Kyiv but also in local areas, especially in the western regions. There are also problems with connecting Starlink stations,” explained the situation in one of the banks.