Mark Tibbles, CEO, Australian Settlements
A recently completed technology overhaul at Australian Settlements Limited has inadvertently triggered a raft of duplicated transactions that has forced the payments processing company to compensate an undisclosed number of clients.
Scant details of the “processing failures” were disclosed in ASL’s 2023 financial statements lodged with ASIC last week.
The service incident occurred after ASL’s June 30 balance date and directors of the company signalled in notes to the accounts that the company was continuing to assess the financial impact of the event.
“In July 2023 the company implemented new payment systems technology, which resulted in some payment processing failures,” ASL directors revealed in the financial statements.
“The company is in the process of assessing the financial impact of this event.
“The financial statements as of 30 June 2023 do not reflect any adjustments related to this event.”
ASL provides settlement services to customer owned banks and fintechs for banking and payments services such as Eftpos, Visa, Mastercard and the NPP.
Its clients include Heritage Bank, IMB and the Newcastle Greater Mutual Group.
The technology misfire caused an undisclosed number of payments to be duplicated which resulted in affected customer accounts being charged twice on the same transaction.
ASL, which has spent the last two years migrating most of its banking and payments platforms to the cloud, is continuing to appraise the fallout from the incident.
Chief executive Mark Tibbles confirmed to Banking Day that a remediation program had been implemented to correct the technology problem and address the impact on customers whose accounts were incorrectly debited.
“We experienced an incident when we cut over to the COIN payments processing system and we had some transaction duplications,” Tibbles said.
“When you go live with a new processing system these sorts of issues sometimes occur.
“The problem has largely been remediated.”
Tibbles declined to quantify the number of transactions affected by the incident or disclose the level of compensation paid by ASL.
“That’s not something I would prefer to discuss,” he said.
However, the ASL chief said he was confident the new system would deliver efficiency benefits for the company which competes against Cuscal in payments processing and as a service provider to customer-owned banks.
“We’re now operating on a digital direct entry platform that is cloud native,” he said.
“We are one of Australia’s most innovative payments companies and with this new technology now bedded down we’ve got an interesting story to tell.”
ASL suffered a slide in net profit in 2023 following a blowout in processing costs and a slight fall in fee income.
The company posted net earnings of A$184,767 – down from the $694,000 bottom line recorded in 2022.
ASL’s earnings were largely shielded from a bigger fall by its large holdings of cash which yielded a material rise in interest income to more than $11 million.