Sudan: Bankak Outages Disrupt Digital Payments, Spur Cash Demand

• Intermittent outages affecting Bankak and Fawry services are disrupting digital payments and market activity across Sudan, increasing demand for cash.
• These disruptions have impacted daily purchases, utility payments, and transport tickets, leading some users to seek alternative financial applications.
• Banking experts highlight poor communication between different platforms and an indirect effect on foreign currency demand due to market disruptions.
• Experts call for banks to improve transparency during outages and for the Central Bank of Sudan to lead the development of a national interoperable payment system.
• The issues have become an economic problem affecting livelihoods, with some traders refusing to sell unless customers pay in cash.

Dr. Abbas asserted that Sudan requires a comprehensive national interoperable payment system, enabling seamless transfers between various banks, digital wallets, and other financial institutions, irrespective of the specific platform used.

Sudan's digital payment landscape is currently experiencing significant intermittent outages, severely impacting financial transactions and market operations. These disruptions, primarily affecting Bankak, the mobile application offered by the Bank of Khartoum, alongside other electronic payment services, have led to a noticeable surge in the demand for physical cash, according to observations from bankers and technology experts.

Both Bankak and the Fawry service, provided by Faisal Islamic Bank, have reported network failures, which have temporarily prevented customers from successfully completing transfers and various payments. Journalist Ayman Mahmoud highlighted the extensive reliance of many Sudanese citizens on Bankak for their daily and commercial transactions, noting the persistent difficulties in processing transfers. As a result of these Sudan electronic transfer disruptions, users are now strategically attempting transactions during off-peak hours, specifically early mornings or late evenings, in hopes of encountering less network congestion.

The widespread Bankak outages in Sudan's digital payments infrastructure have had far-reaching consequences, affecting essential purchases, utility bill settlements, and even transport ticket acquisitions. The ongoing Bank of Khartoum app issues and Fawry service failures in Sudan are prompting some users to explore alternative financial applications, indicating a growing dissatisfaction with the current reliability of these crucial services.

The instability in digital payment systems carries significant economic and social repercussions. Banking expert Abdullatif Ali Ibrahim affirmed Bankak's position as Sudan's leading platform for digital transfers, while acknowledging the presence of other services from institutions such as National Bank of Omdurman and Nile Bank. A critical challenge identified by Ibrahim is the poor communication and integration among these diverse platforms, underscoring the urgent need for a more robust infrastructure to support electronic payments.

Ibrahim emphasized the vital role of electronic transfers during the ongoing conflict, stating they address major logistical challenges and reduce citizens' dependence on handling physical cash. While he dismissed any direct correlation between Bankak's disruption and the dollar exchange rate, he noted that the interruptions indirectly influence foreign currency demand by hindering electronic transfers, purchases, and overall market activity. This situation has evolved into a significant economic problem, impacting the livelihoods of both citizens and traders, with some merchants now refusing to complete sales unless customers provide cash payments.

The recurring digital payment issues have prompted strong calls for systemic reform and enhanced regulatory oversight. Retired police Major General Dr. Essam El Din Abbas, an information technology and data analysis consultant, reported that several banking applications experienced severe disruptions between late August and early September. Dr. Abbas criticized the silence from banks during these incidents, which he argued left customers vulnerable to rumors and eroded confidence in digital banking services. He advocated for treating major outages as critical operational incidents, requiring banks to thoroughly assess their impact, activate predefined response plans, and maintain transparent communication with their customer base.

Dr. Abbas also raised concerns about issues such as duplicate transactions, deductions occurring without successful transfers, and discrepancies in account balances. He urged the implementation of clear systems designed to reconcile failed transactions effectively. Furthermore, he strongly recommended that Bankak, Fawry, and other platforms move beyond operating as "isolated islands" and instead become interconnected. Dr. Abbas asserted that Sudan requires a comprehensive national interoperable payment system, enabling seamless transfers between various banks, digital wallets, and other financial institutions, irrespective of the specific platform used.

He stressed that the Central Bank of Sudan payment system should spearhead this crucial organizational and technical transformation, citing Kenya's successful mobile money system as a model for interoperability. This model allows funds to be transferred across different networks, ensuring continued operation even if an individual application fails. Dr. Abbas outlined five key priorities for Sudan: achieving interoperability, establishing a national payment gateway, developing robust disaster recovery protocols, creating clear rules for managing outages and customer communication, and implementing stringent cybersecurity standards. Compliance officers and legal teams in Sudan should closely monitor these developments, assessing operational risks and contractual exposures stemming from intermittent digital payment system failures, while also anticipating potential regulatory interventions by the Central Bank of Sudan regarding payment system interoperability, transparency, and dispute resolution for failed or erroneous transactions.

Compliance officers and legal teams in Sudan should assess their organizations' operational risks and contractual exposures due to intermittent digital payment system failures, specifically concerning Bankak and Fawry. They should also monitor for potential regulatory interventions by the Central Bank of Sudan regarding payment system interoperability, transparency, and dispute resolution for failed or erroneous transactions.

Source: Original reporting via Dabanga.