People affected included those waiting for salary payments and those trying to move money between accounts.
Payments made during the outage were being restored on Thursday as the RBA cleared the backlog on the fast settlement service.
Real-time peer-to-peer payments via most banking websites and apps were operating again on Thursday as backlogs were processed.
The central bank expressed contrition in a statement on Thursday afternoon.
“We sincerely apologise to industry participants and customers for the inconvenience and disruption caused,” RBA deputy governor Michele Bullock said.
“It was disappointing that this occurred, and we recognise the impact this would have on people relying on the payments system. I want to assure people that the bank takes the stability of the payments infrastructure very seriously and will double its effort to ensure this does not happen again.”
The outage stopped payments being made by bank customers via Osko, which uses the new payments platform (NPP) to send money in the retail market in real time. Banks took heat from customers, who were not sure that payments had gone through.
NPP Australia, which manages the real-time infrastructure, said the Osko system was fully operational once the RBA issue was revolved.
Questions on real-time payments
Payments experts said the outage raised questions about the rollout of real-time payments, which are set to replace the legacy direct entry system, while criticising the RBA for the delay in restoring the system.
Said Brad Kelly, managing director of Payment Services, a consulting firm: “The time it has taken to get it back up is too long.”
It is understood business payments were also hit as a 9:30pm “batch” was not fully processed by the BECS system, leaving many payroll operations not completed and employees without their salaries.
The RBA has said FSS was designed “to quickly settle individual transactions, including payments made by consumers and businesses, 24 hours per day and 7 days a week”. But it tweeted at 8:09am on Thursday saying: “The RBA experienced an internal system engineering issue yesterday evening. The issue has been contained. Impacted external services are now operational however there has been some delay to overnight processing of payments.”
RBA staff went into emergency meetings on Wednesday night that continued into Thursday morning, and are believed to be preparing a major incident report, which should provide more detail about how the outage happened. The RBA declined to say when this would be released.
In a statement to theFinancial Review, NPP Australia said: “NPP staff, NPP participants and RBA staff worked in accordance with defined procedures through last night into the early hours of this morning to respond to this RBA system issue. This work will continue today across the industry to ensure all payments which were impacted through this incident are fully processed.”
Many consumers have taken to social media to express their frustration that payments that were supposed to be sent in real-time were not received.
“I’m still waiting for funds to land in my other bank after transferring out of Westpac last night. Any timeframe on this?” one customer asked Westpac on its social media channel on Thursday afternoon.
A Westpac staff member monitoring the channel responded: “Hi there, I’m terribly sorry to hear of any concern while awaiting your funds, and we’re certainly here to help guide you in the right direction. To ensure we can best assist, could you please send us a DM with further details on what’s occurred?”
The Reserve Bank has made commercial banks report outages to maintain confidence in the payments system. Banks are now considering how this outage will be included in the next set of outage reports to be provided to the RBA.
These reports, published quarterly, have not included the reasons for outages.
Payments experts said the outage raised questions about the speed of the rollout of real-time payments in Australia,including a new service known as PayTo, which the RBA is supporting to create an alternative to card-based payments over the NPP directly from bank accounts.
Said Mr Kelly: “This casts a shadow over the rollout of PayTo, which has still not done a transaction. In terms of consumer protections and risk, we need to discuss whether NPP is a suitable replacement for debit and credit cards, while the imminent retirement of ‘direct entry’ needs to be questioned because it is the only fallback.”
The last major RBA IT disruption was in August 2018, when it experienced a complete shutdown of all primary and back-up power supplies in one of its data centres. This was caused by the incorrect execution of routine fire control systems testing in the data centre by an external party.
That shutdown hit all the RBA technology systems, including the high-value settlement system used by banks and other approved institutions to settle their payments, which was down for around three hours.
Correction:An earlier version of this story said some Centrelink were impacted by the outage; the RBA confirmed all Centrelink payments went through on Wednesday night.
(20min delay)