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I know many people, both in their personal and professional lives, who were deeply affected by the recent CrowdStrike outage. Flights were cancelled, businesses were left completely unable to function, and even TV stations were temporarily knocked off air.
So, I’m not going to dissect the entire series of events. I’ll leave that to others who have a deeper understanding of the complex technical systems at play.
But I do know payments. And payments — both online and in-person — were a major casualty during the global outage.
With all that in mind, I simply want to focus on a very specific topic; payment resilience. It’s something we at TrueLayer think about a lot, and it’s more important than ever for online retailers, travel operators, food and beverage companies and many others to start taking it seriously.
In short, a defective content update was pushed live by CrowdStrike in the early hours of Friday morning (UK time), which affected Microsoft computers across the globe. The popularity of CrowdStrike — one of the world’s largest cybersecurity companies — meant countless businesses were affected.
According to CrowdStrike, “The configuration update triggered a logic error that resulted in an operating system crash.” Upon reboot, the system would crash again and get stuck in an endless reboot cycle.
There were reports that supermarkets, travel operators, online retailers and igaming brands were affected by the outage — and many were specifically unable to collect card payments during that time.
CrowdStrike reported that by Wednesday 24th July, 97% of affected Microsoft servers were back up and running.
Is your payment experience resilient?
When it became clear how widespread the CrowdStrike outage was — and that TrueLayer services across the UK and EU were unaffected — our first job was to see how our merchants were coping and whether we could offer any support.
One thing we quickly noticed was that for those merchants who could not process card payments, but were still otherwise operational, they needed a different way to collect payments. TrueLayer’s Pay by bank was an obvious alternative that could handle the potential influx of payments diverted from out-of-order card payments.
Pay by bank — sometimes called instant bank payment at checkout — is built on top of open banking. With open banking, payments are made directly from the bank to the merchant (and vice versa). There are no unnecessary intermediaries and, importantly in this context, no connection to card schemes or other card infrastructure.
Our customers, by default, had another payment method they could rely on while some card payments remained out of order. But it’s important to note that many alternative payments you may have at checkout are still built on top of card rails. Many buy now, pay later (BNPL) offerings, along with mobile wallets like Apple Pay and Google Pay, are still fundamentally card payments.
“What would it cost your business if your payments went down for one hour? What about six hours? Can you afford to be offline for that long?
In short, payment method diversity equals resilience. Resilience that you’ll still be able to collect payments if something changes unexpectedly.
Being too reliant on one payment method isn’t even a problem reserved for merchants. It’s something the UK Government and legislators need to contend with. Our economy can’t be brought to a standstill when a small number of American companies go down. At TrueLayer, we’re hoping that the upcoming National Payments Vision (NPV) will centre around the delivery of account to account (A2A) payments, powered by open banking, as an ubiquitous alternative to cards.
Payment diversity as a lever for growth, not just a failsafe.
The IT outage forced us to reckon with the dangers of over-reliance on one payment method. With Black Friday, Christmas shopping and January sales on the near horizon, a similar outage at a different time could have been even more damaging. Some journalists have predicted something similar is inevitable.
The question you need to ask yourself — whether or not the recent outage affected your business directly — is “what would it cost your business if your payments went down for one hour? What about six hours? Can you afford to be offline for that long?”
But having several payment methods at checkout is not just about having a failsafe in case of a crisis. It can be about driving more sales at checkout. Even when times are good, it’s worth thinking about.
One example is to cater for payment preference. Each shopper will have their own preferred payment method. Card payments are undoubtedly popular, but their popularity differs across Europe. Don’t give those shoppers a reason to shop elsewhere.
And even if their preferred payment method is cards, for example, it’s worth having a separate payment method that can act as a sales recovery method in case of payment failure. It will help your brand win sales they would otherwise have lost — even if the shopper was fine with the payment method initially offered.
Start building your best-in-class checkout
TrueLayer CEO Francesco Simoneschi has predicted "a world with more payment choice…gone are the days when cards were a necessary part of online payments. More choice and a better experience are out there.”
The events of the last two weeks have simply driven this idea home.
If you’re keen to build diversity and resilience into your payment operations, book a demo and one of my team will help you understand how you can integrate Pay by bank and start building a best-in-class checkout.
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