Monday, October 20, 2025
AWS outage could spark payment-dispute timebomb
A global disruption caused by Amazon Web Services (AWS) on Oct. 20, 2025 has raised alarm in the payments industry as merchants brace for a wave of chargebacks and disputes. The outage began around 3:11 a.m. ET in AWS’s US-EAST-1 region and was traced to a domain-name-system and database-API failure, according to the Association Press.
Reuters reported that thousands of apps, services and financial platforms—including Venmo, Robinhood, Snapchat and UK banks Lloyds Bank and Bank of Scotland—reported failures, slowdowns and connectivity issues.
In the payments arena, the effects of this outage may roll on far longer than the cloud disruption itself. “When AWS sneezes, half the internet catches the flu,” said Monica Eaton, founder and CEO of Chargebacks911 and Fi911. “Outages like this cause frustrated users, but also trigger a domino effect across payment flows. Failed authorisations, duplicate charges, broken confirmation pages, all of that fuels a wave of disputes that merchants will be cleaning up for weeks. And once a customer files a dispute, you are already on the back foot.”
Eaton warned that what follows won’t necessarily be fraud, but confusion. “What I expect now is a spike in ‘I never got my service’ or ‘I was charged twice’ claims. Many of those won’t be fraud, just confusion. But confusion is the number-one driver of chargebacks. If merchants sit back and wait for disputes to roll in, they will bleed revenue unnecessarily.”
She urges businesses to act quickly: “The smart move is to get ahead of the narrative. Run duplicate-charge sweeps. Push proactive notifications to affected users. Document the outage window for clean evidence. Offer fast refunds where appropriate. It is cheaper to fix misunderstandings than fight losing battles in the dispute process.”
As merchants and service providers assess the fallout from the AWS failure, Eaton emphasized, payment operations teams should treat the incident not just as a technical hiccup but as a potential dispute-management crisis. She further cautioned, “The outage will end long before the disputes do. Any business that treats this as a one-day incident is already behind. Downtime happens, but silence and slow responses are what cause real damage.”
Notice to readers: These are archived articles. Contact information, links and other details may be out of date. We regret any inconvenience.
