Failures in retail payment technology jump: RBA

Failures in retail payment technology jump: RBA

The RBA has recommended the NPP, chairman Bob McKinnon, mandate that specified, core capabilities “must be supported by participants within a specific period of time, with a sanctions regime to apply if participants do not comply”.

Ms Bullock would not give specific names of those operators where there has been an increase in the number of outages and a delay in resolution, but did say the retail space had seen a particular rise.

“The rise in total duration was due to both a rise in the number of incidents and in the average duration of incidents,” she said.

Across the board retail outages

“While I can’t show information for individual institutions, I can say that the higher level of retail outages was pretty much across the board.”

She said the rise in problems was best explained by increasing complexity in the technologies.

“The increasing complexity of the IT environment seems to be an important reason why incidents are taking longer to become resolved,” Ms Bullock said.

With the average Australian currently making around 390 card transactions per person per year and a further 125 electronic payments directly between bank accounts, the central bank now expects its monitoring of the industry will have to increase.

“There is, in our view, a case for the Reserve Bank to be looking at what it can do to encourage improved operational resilience,” Ms Bullock said.

“As a first step, we will be working with the industry and our prudential regulator, the Australian Prudential Regulation Authority, to produce a standard set of operational performance statistics for retail payments to be disclosed by individual institutions.”

The central bank was first given legislative responsibility for efficiency, competition and safety of the payments system in 1998.

Ms Bullock said that the declining use of cash for transaction would continue.

“We expect to see a further fall in the use of cash when we undertake our next consumer payments survey at the end of this year.”

But the rate of change in payment methods maybe getting a little ahead of itself with RBA governor Philip Lowe saying last week that he was sceptical about Facebook’s ambitious plan to launch an attack on the global financial system by creating a new cryptocurrency.

Dr Lowe argued there was still “a lot of water to flow under the bridge” on both regulation and its business case before it gains momentum.

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