Visa has apologised after a system failure prevented card payments across Ireland and the rest of Europe on Friday evening, adding that the issues have been resolved.

In an update on Saturday morning, Visa Europe said the problems had been fixed. It said: “Visa Europe’s payment system is now operating at full capacity, and Visa account holders can now use Visa for any of their purchases and at ATMs, as they normally would.”

Visa said the problem resulted from “a hardware failure. We have no reason to believe this was associated with any unauthorised access or malicious event.

“Our goal is to ensure all Visa cards work reliably 24 hours a day, 365 days a year. We fell well short of this goal . . . and we apologise to all of our partners, and, most especially, to Visa cardholders.”

The problems emerged on Friday afternoon and quickly led to long queues at ATMs as people found themselves unable to make cashless transactions in retailers and pubs.

Some Visa cards worked in ATMs and there was evidence of people making large withdrawals due to fears that a prolonged outage would see the machines run out of money during the bank holiday.

On Saturday, a spokesperson for the Irish Business and Employers’ Confederationsaid: “It is too soon to estimate the cost of Friday’s Visa card network failure to Irish businesses.

“However, we are aware it caused significant disruption to trade, with quite a few members reporting much quieter than normal footfall for a Friday evening.”

Lorraine Higgins, deputy chief executive of Retail Ireland, the representative group for retail businesses, said shops had probably lost sales as a result of the problems.

Ms Higgins was at Dundrum Town Centre on Friday evening, where she described long queues at ATMs, indicative of possible “panic withdrawals” by people fearing machines could run out of money.

“It’s causing a lot of disruption to both retailers and customers,” she said. “This should be a traditionally busy shopping weekend. There is huge upheaval as a result.”

People pictured queuing at a Permanent TSB ATM on St Stephen’s Green, Dublin, on Friday evening. Photograph: Tom Honan

Dan Ryan, manager of The Long Stone pub in Dublin, said that at first staff thought there was a problem with the wifi supporting their card machines, adding that the outage had caused disruption to business.

“Obviously, the majority of people are paying by card now so you are [getting] 65 or 75 per cent of your business on Visa cards so it’s a big problem,” he said on Friday evening during the outage.

People shopping in some of the largest retailers in the State on Friday including Tesco, Arnotts, SuperValu and Next said their cards had been declined or payments only went through after multiple attempts.

The problem was Europe-wide and Irish tourists found themselves struggling to access money or buy goods and services in a number of countries. There were also reports of Irish bank customers in the United States having difficulty completing transactions.

British consumer group Which said the issue would have been a “huge inconvenience to customers” and said Visa and the banks now need to ensure no-one is left out of pocket. “We strongly advise people to keep any evidence of extra expenses they’ve incurred in order to claim them back.” – Additional reporting: Agencies