Westpac picks up tab for pay glitch

Last updated 05:00 28/04/2011
PAY GLITCH: Westpac will pay the price for making 10,000 public servants wait an extra day for their pay cheques.

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Westpac will pay the price for making 10,000 public servants wait an extra day for their pay cheques, although they're not sure how much it will cost.

A payment system glitch at the government's banker affected the bank accounts of government employees as widespread as the police force, the Ministry of Health and the State Service Commission.

Late yesterday Westpac spokeswoman Haley Lynch said via a written statement  the bank had processed the majority of the payments, with those left over going through last night.

She said "any fees or charges incurred as a result" of the non-payment would be "absorbed or covered" by the bank.

"Westpac wants to assure all those who were affected that no one will be penalised," said Lynch.

Westpac's standard automatic payment failure fee is $15, while other companies such as utility providers charge varying dishonour fees for failed direct debit payments.

"Westpac wholeheartedly apologises for the undoubted inconvenience this may have caused and totally understands the severity of the issue,'' Lynch said.

The bank has launched a full investigation into the cause of the issue.

The Treasury Department's debt management office, which coordinates the government's commercial banking arrangements, said the issue was being handled by Westpac. It directed all questions on the banking contrac and the glitch to the bank, which wasn't returning calls late yesterday.

Director of the Centre for Banking Studies at Massey University David Tripe said non-payment of the wages could have serious consequences for individuals.

"There'll be money that won't have gone into accounts which means payments won't go out the other side either."

But he said such a problem wasn't uncommon in the commercial world.

National Australia Bank [NAB], which owns the BNZ here, has had several glitches in its payment systems affecting more than a million Australian customers since November last year.

Tripe believed Westpac's contract with the government probably wouldn't prescribe a specific level of payroll performance, but said the competitive New Zealand market was a motivation for the bank to iron out any problems.

"There's competition ... accidents will happen and if accidents happen frequently that's when you start to get concerned about the quality of the service being provided to you.

"At this stage I suspect they're thinking an accident has happened, so I don't think we necessarily need to chuck the toys out of the cot and jump up and down.

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"One would expect it's probably an electronic file of transactions got left behind somewhere and it's just a matter of picking them up and processing them."

- BusinessDay.co.nz

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