COVID-19: time for co-operative solutions, perhaps?

Bernard Foot, Strategy Analyst at global Payment HSM as a service provider MYHSM, thinks about how Covid-19 could bring down the payments system and how the industry could co-operate to prevent this.

Unfortunately, there’s really only one item of news these days: COVID-19. We’re all sitting at our screens trying to carry on as normal, but at the same time watching helplessly as this disaster unfolds around us.

In response, some companies have rightly focussed on protecting their staff and finding ways to protect them from infection by minimising social contact. In our industry, the working from home “bubble” is practicable for many people. In fact, I noticed in my local convenience store today that they have marked “do not cross” lines on the floor at the checkouts to make sure customers keep a 1-1.5 metre separation from staff. In other industries, such as healthcare, we have seen workers lives lost who are providing life-saving services for others and who cannot shut themselves off.

Companies are also now thinking about business continuity and, if the worst happens, disaster recovery. For many companies, such as those in the leisure and hospitality industries, the battle centres around the ability of the company to survive a prolonged period of diminished income. But in some industries – and payments is one of them – the stakes are a lot higher than the survival of individual companies.

For the world to continue functioning in some meaningful way the payments ecosystem must be maintained. Without this, economic activity will fade away, people will no longer have the option of self-isolating at home by buying essential supplies online, and a resurgence of cash transactions will accelerate the spread of the virus through contact with banknotes and coins.

So how could a pandemic like COVID-19 bring down the payments system?

In many ways, the payments industry should be quite resilient. There is relatively little in the way of physical products and materials, and so it is relatively unsusceptible to a disruption of logistics. In general, people do not need to congregate in large numbers to enable payments to work, and many employees in the payment’s world can work from home.

But there is perhaps one Achilles’ heel that comes to mind: the IT infrastructure. Companies operating their own data centres face the risk of a virus outbreak reducing staffing levels to unsustainable levels, or even closing the data centre altogether. Finding temporary replacement staff will probably be impossible.

Companies who have moved their IT infrastructure into the cloud may be somewhat better off – the scale and sophistication of the major hosting and cloud providers will make it more likely that they can weather the storm. But now, if the worst does happen, we could see multiple payments institutions going offline.

It seems to me that an insurance policy is needed – not one that will pay some compensation if everything has gone belly-up, but one that will allow operations to continue if the IT infrastructure is compromised.

Many payments applications will now work in the cloud, and so users should be discussing, with their application vendors and cloud providers, the possibility of setting up standby cloud-based application centres which could be brought into play if an in-house or existing cloud data centre had to go offline. The complexity would not be as great as for a more typical DR site because switchover and database transfer could be planned rather than having to happen instantaneously.

This will not be a cost-free insurance policy; some companies will make money out of this, but they will be providing a life-saving service to those who are paying. It will take time to set up such an option, but COVID-19 will not be disappearing any time soon.

Find out more about MYHSM and its services here.

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