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Payment outages: Experiences and issues

Author

Listed:
  • Khiaonarong, Tanai

    (Senior Financial Sector Expert, International Monetary Fund, USA)

  • Rizaldy, Ryan

    (Director, Central Bank of Indonesia, Indonesia)

  • Leinonen, Harry

    (Chief Executive Officer, PSS Consultancy, Finland)

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.

Suggested Citation

  • Khiaonarong, Tanai & Rizaldy, Ryan & Leinonen, Harry, 2022. "Payment outages: Experiences and issues," Journal of Payments Strategy & Systems, Henry Stewart Publications, vol. 16(2), pages 170-180, March.
    • Handle: RePEc:aza:jpss00:y:2022:v:16:i:2:p:170-180
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    More about this item

    Keywords

    operational resilience; payment systems; risks; disasters; business continuity;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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