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Payment outages: Experiences and issues
Journal of Payments Strategy & Systems,
16
(2),
170-180
(2022)
Abstract
Major operational incidents in payment systems suggest the need to improve their resiliency. As payment infrastructures become more digital, integrated and interdependent, with users demanding real-time and uninterrupted services, a higher degree of resilience is required. Risks that could trigger major disruptions have become more acute given the rise in power outages, cyber incidents and natural disasters. International experiences suggest the need to strengthen (1) reliability objectives, (2) redundancies, (3) assessment of critical service providers, (4) endpoint security and (5) alternative arrangements. A comprehensive restructuring of resiliency plans — across the entire payment value chain — is also needed. This paper draws lessons from recent operational incidents to suggest ways in which operational risk management frameworks could be strengthened given evolving payment systems, increasing user expectations, developing technologies and varying country circumstances. The objective is to share observations from international experiences and explore operational and developmental issues to facilitating the stronger operational resilience of existing and future payment systems.
Keywords: operational resilience; payment systems; risks; disasters; business continuity
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Author's Biography
Tanai Khiaonarong is a Senior Financial Sector Expert in the Monetary and Capital Markets Department of the International Monetary Fund (IMF). He has served as an assessor of financial market infrastructures and adviser on payment systems oversight for many member countries of the IMF. His research interests include cash use, central bank digital currencies, mobile payments, correspondent banking relationship withdrawals, cross-border payments and FinTech.
Ryan Rizaldy is a director at the Central Bank of Indonesia, where he engages in payment systems policy issues. He was involved in the establishment of the 2025 Indonesia Payment System Blueprint domestic standards for retail payments, the national payment gateway and experiments with central bank digital currency. Ryan was formerly with the International Monetary Fund, where he was an externally financed appointee in the Monetary and Capital Markets Department.
Harry Leinonen retired in 2016 as financial counsellor specialised in payment & settlement issues at the Finnish Ministry of Finance. Before that he was attached to the Bank of Finland mainly as advisor to the Board. He has also worked within the Finnish private banking industry and has served in several domestic and international committees and working groups. Harry is the author of several articles and books on these issues. He now works as a consultant, author and lecturer.
