Osko fast payment crash blamed on Reserve Bank technical glitch
A major outage of the Osko online fast interbank transfer system has left payments in limbo, with the Reserve Bank admitting fault.
- The “real-time” payment system Osko was dismantled by a technical failure overnight
- The Reserve Bank took responsibility for the blackout
- Banks scramble to process overdue payment
The ABC understands Reserve Bank officials met this morning to discuss the matter and the RBA will release more information on the outage later today.
The Osko payment service allows customers to send money online almost immediately and is used by 85 Australian banks.
It’s unclear how many bank customers were affected by the outage, but the ABC was told the number was “significant”.
The outage began as early as 7 p.m. AEDT on Wednesday and was resolved around midnight, according to the RBA, which provides the physical infrastructure for the system.
However, there are still delays in processing some payments.
Some banks have suspended Osko payments after finding transfer problems.
In a statement, the RBA acknowledged fault for the outage.
“The RBA encountered an internal systems engineering issue last night,” the statement said.
“The issue is now under control. The relevant external services are now operational, but there was some delay in processing payments overnight.”
How does OSKO work?
Osko facilitates fast money transfers between participating banks using a BSB and bank account number.
Its website says the transfer usually happens in less than a minute.
Osko is part of the RBA’s new payments platform, launched in February 2018, to allow transfer recipients to access their money within minutes of sending it.
It was developed through a partnership between the Reserve Bank of Australia (RBA), banks and BPAY.
The RBA provides the infrastructure for the system.
Its previous electronic transfer system regularly experienced delays of several business days between the money leaving the payer’s account and its availability in the recipient’s account.
PayID – which uses a mobile number, email address or ABN instead of a BSB and account number – was also affected by the outage.
Osko customers have taken to social media to vent their frustrations.
Banks are now scrambling to catch up with the backlog of payments.
ING has told customers it expects payments to be processed and received by the end of the day, but does not have an exact time from Osko.
ANZ said customers should resubmit payments once the amount has been refunded to their account.
Other banks advised customers not to try to pay again.
In a statement, a spokeswoman for Westpac said that while the issue has been resolved, some payments made online and on mobile may take longer to process or, in some cases, be rejected.
“Customers should not attempt to redo a payment if it is still pending,” the statement said.
“If customers receive a failure message, they should retry payment. We appreciate your patience and apologize for the inconvenience.”
“There is no turning back”
Gerard Brody of the Consumer Action Law Center said “banks should come to the party” and ensure customers are compensated if they incur fees or interest due to failed payments.
“I would be really disappointed if banks were charging people late payment fees associated with missed payments because their own systems went down,” he told ABC News.
“If you have suffered any damage, you can file a complaint against your bank.
“If the bank does not respond, you can complain to the Australian Financial Complaints Authority, which is the free and independent dispute resolution body for complaints against banks.”
Brad Kelly – who runs an independent consultancy called Payment Services – said the incident highlighted serious risks in the new payments platform.
“This is an incredibly large outage. It’s sort of number one on the list, so it probably won’t get any worse than that,” he said.
“Although, I note, that was cleaned up pretty quickly.”
The main problem, he argued, was that there was limited redundancy if the nuclear plant collapsed for some reason.
“What he tells us is that there is no retreat,” he observed.
“The only alternative is to go back to the old direct debit, direct credit, it’s called different things, direct entries, a mass electronic clearing system. It’s the same thing.
“Australians are familiar with it, it’s an overnight settlement. It’s the fallback. And unfortunately the Reserve Bank has signaled that it’s going to be withdrawn, there are also rumors on the street that BPAY will also be removed.”
“You are left dead in the water”
Geneviève Cheetham works for a major retailer and has not received her salary due to the breakdown.
She was contacted by her employer this morning, who said he was working with her bank to resolve the issue.
“I live paycheck to paycheck and co-parent two young children,” Ms Cheethem said.
“I make money and my frustration is not being able to access it.”
Ms. Cheethem has run out of money and has no choice but to contact the Salvation Army for food stamps.
“Today was one of the days I have my kids, that means I’m literally waiting for my paycheck to come in to get fuel, get groceries, get food for lunch,” a- she declared.
“We use these systems, and when these systems don’t work, you’re left dead in the water.”