Inside the race for payments resilience
In COLLABORATION with
Just after 12:30 p.m. on April 28, 2025, the lights went off in Spain and Portugal.
A total blackout, which lasted up to 16 hours in some regions and was the most severe in Europe in 20 years, affected homes, businesses, and essential services across the Iberian Peninsula.1,2 The payments system was hit hard; Spanish bank CaixaBank reported that Spanish household consumption spending fell by 34 percent as a result.3
“What happened was a textbook example of a crisis rendering digital payments useless,” says Guillaume Nonain, President of ESTA, the European Cash Management Companies Association.
The disaster cost Spain’s economy an estimated €1.6 billion, but such a scenario may become more commonplace.4 The European Central Bank has warned banks in the eurozone to expect more frequent shocks, due to geopolitical risks, weather-related outages that could compromise the ability to process payments, and technological disruptions, and has required them to be prepared for a range of possibilities, including crises that are impossible to predict.5
Against this backdrop, there has been a shift in the way that businesses, central banks, and governments are thinking about payments resilience. They have stopped believing that preparedness alone can be enough to safeguard them against disruption and are instead looking for backstops to reduce the damage that inevitable disruption will cause.
As resilience becomes an increasingly urgent global priority, it is spurring a wave of innovative thinking—and new ideas are gaining traction in the effort to keep economies moving.
Guillaume Nonain
President of ESTA, the European Cash Management Companies Association
The threat landscape
Payment disruptions are felt worldwide.
Without functioning payments systems, goods and services cannot be bought, revenue flows stall, and public trust collapses. In the case of a widespread disruption, societies face breakdowns in supply chains, public services, and social stability.
As more consumers come to rely on digital payments for their transactions, the vulnerabilities grow. Power outages are just one threat vector—a number of others have recently risen to the top of the agenda.
Cyberattacks
A series of cyberattacks against UK retailers in 2025, which disabled business-critical services and impacted their ability to operate, were a lesson for the wider payments sector.6 “Let's be blunt, everybody who has financial resources in any scale is a target for a cyber group that is just out there to extort any business,” says Duncan Mackinnon, Executive Director for Supervisory Risk Specialists at the Bank of England. “Hackers don't really care too much whether you're an insurer, a bank, or financial market infrastructure.”
Europe is experiencing the biggest surge in cyberattacks of any global region. Organizations in the payments sector are among the targets.7 In April 2025, for example, there was a Distributed-Denial-of-Service attack on the European data centers of a major payments platform.8 The question of whether cyberattacks could take out payments at an even larger scale is not fanciful. Lloyd’s has published a report modeling the impact of a “plausible” cyber attack on a major financial services payments system, estimating the resulting global economic losses to be $3.5 trillion.9
AI has made this threat more acute. It has lowered the bar for less expert hackers, and is a force multiplier for specialist hacking groups. In September 2025, an AI company said it detected attackers using its model’s agentic capabilities to orchestrate what it believes was “the first documented case of a large-scale cyberattack executed without substantial human intervention.”10
Geopolitical risks
Geopolitical risks have grown in recent years, driven by major political realignments and interstate conflict. Both the International Monetary Fund (IMF) and the European Central Bank (ECB) have voiced concerns about the implications for financial stability, and geopolitics consistently ranks among the top concerns cited in the Bank of England Systemic Risk survey results.11
In December 2025, an undersea telecoms cable on the Baltic Sea floor connecting Finland to Estonia was damaged.12 It was just one in a series of incidents that have sparked fears around how connectivity could be deliberately compromised to impact critical services like payments. The IMF said that in order to maintain resilience, it is “more important than ever” that countries adopt appropriate policies.13
Single points of failure
A core reason that payments are so vulnerable to geopolitical and operational risks is because it is an interwoven ecosystem that relies heavily on a relatively small number of providers.
On the one hand, there are providers who underpin the internet infrastructure on which so much of the global economy now depends. In 2024, for example, a faulty software update from a cybersecurity company triggered the biggest IT outage in history.14 It took down 8.5 million devices around the world, shut down payments systems and cost Fortune 500 firms alone an estimated $5.4 billion.15
On the other hand, there are payments-specific dependencies.16 Take card networks. GlobalData’s Payment Cards Analytics report shows that 42 percent of total European card payments’ value was processed by Mastercard and Visa in 2025.17 Cards are less prominent in other global regions, but there, too, dependencies exist. In India, for instance, the UPI instant payment system suffered multiple outages in spring 2025 due to a series of technical glitches, disrupting a service that handles nearly 18 billion transactions a month.18
The Solutions
How can payments continue to operate seamlessly when disaster strikes?
Operational readiness is a baseline necessity. “It’s not about if the worst happens, it’s when,” says Josh Pope, Global Head of Payments Operations at J.P. Morgan. Planning thoroughly means charting dependencies, having clear internal and external communication strategies ready for roll out, and ensuring every employee in every department—from finance to tech to data to strategy to risk management—sees resiliency as a top priority.
Failure drills can help with this. Financial institutions run exercises that might involve disabling one of their international banking hubs and mapping the impact and workarounds and looking for where gaps exist. And then there are group exercises, like the Bank of England’s SIMEX 24, where UK-based financial authorities and financial sector firms jointly work out what they would do in response to a common scenario.19
Pope adds that J.P. Morgan not only runs its own tests to help ensure it can survive outages and disruptions to maintain a frictionless payments experience for clients, but the bank also regularly works with clients, industry partners, and regulators to run simulations, test processes, and establish resiliency practices for the benefit of the whole system.
Yet operational readiness is as much about the design of the payments system itself. Maintaining multiple rails that provide mutual redundancy is seen as best practice, as is relying on technology that is geographically distributed.
“But there is always potential for these incidents that will break even the best designed system,” explains Majid Malaika, Digital Transformation Lead at the International Monetary Fund. A prolonged outage caused by a war, say, can be a lot more challenging for a payments system to withstand. “Areas that have conflict issues have disruptions of electricity and networks too.”
Therefore, the need remains for solutions that can keep going even when the network does not. Here are four...
1.Cash is king
Imagine: a shopper tries to pay for groceries with a digital wallet, and the card machine returns an error. It won’t accept a physical card either, and the shopper can’t even log on to their banking app to troubleshoot. It’s unclear whether the issue lies with the shopper’s account or is something more widespread. Their only remaining option is to hope they’re carrying some cash.
In 2025, French customers faced this exact scenario when supermarkets experienced a multi-hour card network outage that affected payment devices.20 Shoppers who did not have sufficient cash on them had to abandon their baskets.
Cash remains the perfect backstop when other payment methods fail. It’s pocket-sized and holds agreed value that does not vanish if machines stop working. In some countries, such as Lebanon, a financial crisis has resulted in a largely cash-based economy.21 But on the whole, the world is digitizing, and cash usage is declining.22
The customer-facing business world once considered card transaction fees to be a cost that made them actually prefer cash. In the last few years, however, that preference has switched to the exact reverse. Across Europe, companies have started to avoid cash transactions as they consider handling cash to be an unnecessary cost, and some in the UK have gone one step further and decided to stop accepting cash entirely.23 In Japan, where physical currency has long been the preference, cashless payments accounted for 58 percent of total consumer spending in 2025, a value of 162.7 trillion yen.24
The likelihood of an increasingly complex threat landscape may change that once more. “If you look, for example, at Sweden and Norway, they’ve gone very far in removing cash from daily transactions and becoming almost cashless,” says Nonain of ESTA. “And those countries are reversing, as they are realizing that this may result in big issues.” Norway, for example, has passed a law to oblige businesses to accept cash.25
Some countries have come up with so-called national cash resilience plans, to be able to ensure a sustainable payments ecosystem when things go wrong. A good example is in Estonia, where they have 50 to 60 emergency ATMs that have their own power source and can continue to issue bank notes if there has been a blackout.
A common argument against cash is that it is physically vulnerable—it can get lost and damaged—and that it is challenging to manage logistically. In response, Nonain points to technological solutions such as the new generation of “smart safes” that businesses can buy. These not only store cash but automatically count it and update the business’s bank balance. “It makes it safer and more convenient and as easy to accept a cash payment.”
2.CBDCs: A third form of money
Keeping cash flowing alongside digital payments is a key resilience strategy. Malaika says that some central banks are examining whether retail Central Bank Digital Currency (CBDC) could serve as “a third form of money” and contribute additional operational redundancy under certain disruption scenarios.
One of the key reasons is that CBDCs can be designed to also work offline. This is an idea that a number of central banks are exploring, including the European Central Bank with its digital euro.26 Offline functionality is possible because the digital euro is being designed to mimic cash: money is stored on a phone or smart card rather than being held in a bank account. The consequence is that payments don’t require the internet to take place. Two devices can connect directly by offline means, and funds can be transferred. Later, when the devices have connectivity, checks are made and the new balances are synchronized with the wider ecosystem.
For Malaika, this is invaluable for ensuring payments resilience, particularly in the event of conflict or public unrest. He notes that these scenarios can lead to elements of the payments system being physically damaged or inaccessible, and that recovery times and scope for restoration can be uncertain. Offline CBDCs can provide a workaround. “You have these intermittent disruptions that take place, but sometimes you have this complete blackout for a very prolonged time,” he says. “So, a CBDC or a payment instrument designed with an offline capability would provide you some protections.”
In an IMF report that Malaika co-authored, the authors outline considerations for how such offline-capable systems could be designed.27 These include supporting a range of front-end interfaces to ensure funds remain accessible even if one or more channels are compromised, and also considering cross-border support to ensure payment continuity for conflict migrants and refugees.
David Birch, Global Ambassador of the payments tech consultancy Consult Hyperion, says that offline functionality is precisely the kind of use case that justifies creating a CBDC in the first place. “If we think about CBDC as just a thing for making payments, it's borderline pointless,” he says. “But if we think of it as having other goals like making the payment system more reliable, it takes on a different complexion.”
That’s not to say it’s a silver bullet. Financial and security risks increase with longer offline durations, in particular counterfeiting and double spending. When a payment happens offline, it is disconnected from a ledger that can verify funds are legitimate and have not already been spent. But cryptographic solutions to address these issues exist, Malaika says, so ultimately it comes down to how a system is designed. “It's the building, the maintenance, and then your security hygiene. That would become that decisive factor for a CBDC to maintain its security.”
3.Offline card processing
In 2024, several Finnish banks were subject to prolonged, targeted cyberattack campaigns. Finland’s central bank decided to examine what more it could do to protect the payments system—an appealing target for bad actors hoping to cause societal unrest.28
Offline card payment systems emerged as the solution of choice. Given the dominant role of credit and debit cards in Finland—Bank of Finland board member Tuomas Välimäki puts the share of in-store payments made either with a physical card or a digital wallet between 80 and 90 percent—focusing on card resilience makes sense. Välimäki emphasizes that this would not be presented as an alternative to holding cash, but as an additional measure to improve system redundancy. “We also believe that every household should hold some cash for contingency purposes,” he says.
The project is being devised in tandem with Sweden, Norway, Denmark, and Estonia, and is currently undergoing a consultation phase with banks, merchants and consumer advocates.29 It would allow consumers to use their physical cards as normal during outages. Transactions would be approved in principle, but verification would be delayed until the system was back online.
This isn’t technically new technology, says Välimäki—it’s similar to what is offered currently on airplanes during in-flight transactions, where the card terminals process all transactions on landing. That’s why the challenge is less one of rolling it out at scale, but simply making sure merchants on the ground have tried it out and know it works.
The big, remaining debate is around risk. What if a transaction gets declined long after a customer has acquired goods or used a service—if the money can’t be reclaimed, who carries the loss: the card issuers, banks, or merchants? “This is why we need a coordinated approach,” says Välimäki.
Tuomas Välimäki
Board Member, Bank of Finland
4.Breaking dependencies
A change is coming in Europe. The European Payments Initiative—backed by 16 European banks and payment service providers—launched a digital wallet and account-to-account payments (A2A) platform in 2024 called Wero.30 India has UPI, Brazil has Pix; the vision is that Wero will be Europe’s answer by completely recalibrating the continent’s payments ecosystem with a standardized A2A payments experience.
The rationale behind a domestic A2A scheme is not simply convenience and efficiency, but also resilience. On the one hand that’s about increasing the number of available rails to enhance redundancy. On the other, it’s about autonomy: not relying on payments infrastructure—whether that’s card networks or digital wallets—headquartered in other geographies.
A2A schemes can be designed to work when the internet is down or intermittent, too. Birch points to the instant payment tools in Africa that are being adapted to work via SMS or Bluetooth, enabling transactions on basic phones or offline terminals.
Two other existing technologies stand to play an important role in any country’s efforts to reduce strategic payments-related dependencies. The first is SoftPOS (Software Point of Sale), which turns a smartphone or tablet into a contactless payment terminal without extra peripherals. That means any merchant with a functioning device can continue to take payments even if the power’s out or the card machine isn’t working. “They've probably all got a smartphone anyway,” says Birch, “so you can just get an app and take the payment that way.”
The second technology is satellite broadband. The market for satellite constellations providing access to low-latency, high-speed internet is growing fast; one estimate predicts that it will be worth $20 billion by 2030.31 Satellite broadband can improve resilience by providing an alternative way of accessing the internet, and therefore making payments, if land or sea cables are damaged.
The last mile of payments resilience
For all the discussion of national A2A schemes and government policies, resilience plays out at a much smaller scale in practice. The proof is at the point of sale: Can that company take payment from that customer on that day?
That’s why individual businesses might be considered the “last mile” of payments resilience. Cash won’t help if the person at the checkout doesn’t have the means to accept it. Offline cards are irrelevant if the business isn’t familiar with the tech.
Crucially, it’s the responsibility of the C-suite—from finance to technology to operations—to embed a resilience mindset into company culture, implement clear policies, train staff, and regularly test contingency measures. Everyone must know not just how they’d respond to a widespread outage, but also a more localized one. In all cases, the name of the game is readiness, not total elimination of risk. Even the most prepared business can find itself suddenly affected by a payment interruption—one that prevents it from serving customers, paying staff, or ensuring seamless supply chain control.
“We know things are going to go bump in the night,” Pope says. “There are going to be disruptions, maybe geopolitically, maybe from a weather perspective, maybe from a technology disruption, or there could be adversaries attacking. You have to be ready every day, every hour, every minute, every second, so that when that disruption happens, you're ready with your playbooks that you've practiced over and over again.”
“We know things are going to go bump in the night,” Pope says. “There are going to be disruptions, maybe geopolitically, maybe from a weather perspective, maybe from a technology disruption, or there could be adversaries attacking. You have to be ready every day, every hour, every minute, every second, so that when that disruption happens, you're ready with your playbooks that you've practiced over and over again.”
Pope says that the recent rise in threats has indeed led to a transformation in how companies treat risk management. A growing cohort of leaders with “healthy” paranoia are prioritizing mapping risks much more effectively. “Both internally and externally, we as an industry are moving quite significantly up the maturity curve around resiliency.”
A crucial piece of advice for any company developing its strategy is to pay particular attention to communication. If a payment disruption happens, honesty and openness with clients is important for retaining trust, and internal communications are just as vital. “A medium-sized bank or insurer will have hundreds or thousands of employees,” says Mackinnon. “That internal communication is absolutely critical, because people will be scared.” Pope adds it’s also essential to communicate upwards. “Be transparent with your management about areas of uncertainty or where you may fail. Do not tell management that you're going to succeed on all fronts.”
In the midst of a crisis, it can be easy to imagine it will keep going forever. But at some point, an organization will come out the other side. When that happens, how it resets is just as important as how it got through the disruption in the first place. If a cyberattack takes out its payments systems, for example, the business should practice good data hygiene: reissue equipment to staff where necessary, and ensure internal networks are clean. If it is affected by a wider outage that hits the economy at scale, the goal is to ensure that when the infrastructure eventually comes back online, the organization is positioned to reconnect and resume immediately.
“That path to recovery is beyond important,” says Mackinnon. “It is absolutely critical.”
https://www.jpmorgan.com/payments/payments-unbound/sources
Illustration: Matt Murphy
