Optus outage and cashless payments
Optus, a major internet service provider in Australia, had a major outage today. This was the largest phone outage in Australian history with 10 millions customers being out of service. Internet connectivity was down for a huge number of people as well.
Australia has been in the midst of a mindless contactless payments pandemic for a number of years now. At first this changed the behavior of consumers but eventually the behavior of businesses changed as well. Many consumers started to use their plastic cards for payments more and more, there were a lot of reasons for this, but the push towards a cashless system has been a strong one with enormous amounts of resources spent on trying to convince people to use more cashless payments over the years. Of course there's a huge number of hidden fees in this system and businesses get screwed over by those fees relative to cash. But after enough people started to use cashless payments some businesses started to think along the lines of "if not a lot of people are using cash what if just went cashless only to save the cash handling expenses and difficulties?"
These retail businesses that decided to do away with cash payments were completely shut down today as the internet outage meant their payment terminals ceased to work. The flow on effects of such an outage in a significantly cashless society are massive, people simply lose the ability to transact. For example getting to work and needing to refuel your car becomes impossible to do if you can only pay with card but nobody can accept the payment. Then that person who's not at work because they couldn't travel then impacts their workplace, which then reduces that companies output, and so on. But say that person managed to find another way to get to work they might not have been able to get anything done if their company was reliant on cloud software services to get anything done. There's very deep chains of impact in these circumstances due to the exceedingly small amount of slack capacity that modern western businesses structure their operations to have1.
I think a detailed post mortem of how this outage occurred would be an important thing to improve service delivery in the future. This is a matter of literal national security when you consider just how problematic such a large outage is.
Optus was very quick to state that this outage was not from a cyber attack. I'm sure that some people would have taken some comfort in this, but to me it had the opposite effect. An act of active malice that took down a huge percentage of the Australian internet infrastructure would have been less concerning to me than something that happened due to an internal mistake.
A while back Optus was the target of a massive data breach. This was one of the largest in Australia's history. There was supposed to be a report into why this happened, but that report seems like it won't be released to the public.
This outage is not unprecedented worldwide
A while ago there was a major internet outage in Ontario Canada.
A good example of this is Just In Time logistics, I wrote an article about the risks of JIT logistics that is a good example of this dynamic. Many companies in the West like to structure their operations such that they make the most profit in the immediate future, building in redundancy and safety is something where the costs are immediately obvious in the current quarterly report but the benefits come later. As a result there's a structural incentive created to not do things like maintenance as management incentives are often structured around increasing short term profits only. ↩