Third parties behind most payments strife

Ian Rogers

The leading cause of payments outages are issues with third parties, analysis by the Reserve Bank of Australia has found.

In 2012 the RBA started collecting incident reports from payment service providers on unplanned retail payment service outages. Following an increase in payment systems outages over 2018 and 2019, the RBA collaborated with industry to improve the quality of the RBA’s data collection by establishing a standardised set of statistics to measure operational outages in retail payments.

To support the transparency of retail payment service reliability, the RBA also expects individual providers of payment services to publish a standardised set of statistics about the availability of their services on their websites, an article in the October RBA Bulletin says. These disclosures commenced in November 2021.

Of nearly 1100 outages to Fast and Next-day Payments from the September 2021 quarter to then March 2021 quarter around 440 were due to a third party root cause.

An incident will have a third party root cause if there is a network or communications failure, a service provider failure, a system-wide infrastructure error or a natural disaster.

The duration of incidents resulting in service outages vary by root cause and business day. 

“Incidents have generally taken longer to resolve when they have been detected on a business day and where the cause can be traced to change management or third party issues. 

“This may seem counterintuitive, but further investigation shows that incidents occurring on a Monday have the longest time to resolve on average, as it is common for system changes and upgrades to be scheduled over the weekend” the RBA said.

“This insight highlights the challenges of managing incidents caused by process or technological changes that are introduced outside of business hours and the importance of effective testing when system changes are implemented. 

“As consumers increasingly expect retail payment services such as card payments, fast transfers and online banking to be available 24/7, it is important that service providers have the ability to swiftly address outages, irrespective of whether they arise within or outside of business hours” the RBA said.