My wife was in a local store a few days ago, whose fancy touchscreen CBA device was ‘out of order’. She was unable to buy there, and was told by staff that very few people got cash from the nearby ATM and came back; they instead went to the Coles store 15 metres away.
So the shop was losing a day’s business because their banking device was ‘down’. I gather that this was a widespread outage, but the banks don’t promise 100% delivery - they rent the machine out to the merchant who then has to rely upon ‘thoughts and prayers’ to hope the technology doesn’t bankrupt them.
There are cashless networks that never fail, of course (unless the Internet does - and that means the end of society anyway). Cryptocurrencies like Bitcoin and Etherium rely upon the entire world to make sure the network remains up and transactions balance.
No - your current card can almost certainly do NFC transactions, where you simply hold the card near the terminal and the terminal reads the information it needs. Only one end of the NFC transaction needs all the smarts. Phones do NFC card emulation, meaning that you don’t actually need to carry the card with you, and that you can scan the loyalty card and all the coupons at the same time as you pay for your purchase.
I must admit that I bought a bunch of NFC tags a while ago, thinking that I could use them in various places to tell my phone what it should do (e.g. in the car: make sure Bluetooth is turned on, connect to car stereo, start playing Zenyatta Mondatta, turn screen off). I have an IFTTT rule that turns off WiFi when I leave my home, that is based upon Google Location Services, but if I used an NFC tag stuck on the door frame to do this, then I could stop Google from tracking every step I take. Of course, I have to date been too lazy to do any of the work necessary to get these things going, but they are incredibly cheap to buy so it’s not something I’m too worried by.