Small businesses around the world were left unable to process payments for more than an hour on Tuesday morning, as mobile point of sale provider Square suffered a widespread outage.

Millions of small to medium businesses use Square readers, terminals and registers as a lower-cost way to accept payments via card. But just before 8am AEDT on Tuesday many businesses began reporting that no payments were going through, with Square saying at 7.54am that it was experiencing “degraded performance”.

The outage hit during a busy period for Australian cafes on Tuesday morning. Credit:Eddie Jim

By 10.14am the company said that payments for most cards were going through. But for some businesses in Australia, particularly in the hospitality industry, the outage came at one of the worst possible times.

“Eight to nine, just before work starts, that’s our busiest period for the day when it comes to coffees,” said Andrew Mellody, managing director at Co-Ground, a not-for-profit social enterprise that operates cafés and office-based pop-ups in Melbourne.

All five of Co-Grounds sites were affected. Some Square systems were still operating, meaning cash payments could be processed, but four of Co-Grounds sites are set up for cards only.

“Those in hospitality like us have been hit hard over the last few years, so it’s not it’s not a good thing to have a trade blackout for over an hour,” Mellody said.

“We implemented an honesty system where we continued to serve our customers, to encourage them to come back and pay at a later time.”

Many businesses were unable to process card payments through Square on Tuesday.Credit:Square

While Square devices occasionally experience outages due to internet issues, bank problems or specific hardware combinations, a complete outage like the one on Monday is rare. Stripe and PayPal experienced issues at the same time, though they seemed to be limited to payments from Discover. cards.

A Square spokesperson said that although payments were now going through, its devices were continuing to decline some Discover cards. The company is still investigating.

Square, which was founded in 2009 by Twitter co-founder Jack Dorsey and Jim McKelvey, changed its name to Block in 2021 although its point-of-sale platform remains known as Square. Last year, the company acquired Australian start-up Afterpay for $39 billion.

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