The global chip shortage is one of the most vital issues these days. While Smartphone manufacturers have remained its victim and as a result, the companies had to delay the launch of devices, this shortage is now about to affect online payments as well. The smart Payment association has warned about the consequences of a chipset shortage on payment cards (Debit/Credit) and urges to address this issue as soon as possible.
This outrage has resulted due to the pandemic when most of the chipmakers had to shut down their operations. After they reinstated the operations, they had a huge backlog to fill. The semiconductor industry is the first victim of this global shortage. As mentioned above, equipment manufacturers had to delay their production lines due to an inadequate supply of chips.
Global chip shortage Threatens to derail the online payment system
Due to the bottleneck in supply and chain, the manufacturers are facing a lot of issues in getting the chips to be included in the card. The association outlined that more than 3 billion EMV based payment cards are produced each year throughout the globe when people open a new bank account or renew cards after expiration.
This shortage will be expected to continue till late 2022 and due to this, the bottlenecks in the chip supply have become critical. It seems that the card manufacturers will also be hit by this significant disruption and soon banks will not be able to meet the full demand, hence hurting online payments.
For a developing country like Pakistan, where online payments have just gathered the pace, this shortage will be a huge setback. The e-commerce sector of Pakistan is already facing hiccups when it comes to digital payments will not have a good fate if this issue is not catered on time. As far as online payments are concerned, banks offering this facility will be the most vulnerable but at the same time, digital payments platforms (cardless) will likely witness an increase in subscriber base and digital payments due to this chip shortage.