A range of new innovative and secure payment options will continue to become more available to New Zealanders, with open banking partnering underway by the country’s four largest banks through a common standard.
ANZ, ASB, BNZ and Westpac NZ were required to make the API Centre’s Payment Initiation standard available by today (30 May), under an implementation plan agreed in May 2023.
Payments NZ chief executive Steve Wiggins says he looks forward to seeing open banking payment options increase.
“Today is a massive day for open banking in Aotearoa New Zealand. In short, it’s the date set for the four largest banks to be ready to link up with registered third parties to offer open banking payments.
“It’s really exciting that all four banks have now entered into partnerships with at least one third party to use our standard.”
Examples of services available or soon to be released were presented at an Open Banking Showcase on 23 May.
At the event, held in Tāmaki Makaurau and livestreamed during Techweek, BlinkPay, Qippay, Volley and Worldline demonstrated the payment methods they have developed that use the Payment Initiation standard.
“It has taken real effort and perseverance to get here, but we’ve taken a huge step forward as an industry towards making open banking part of everyday life,” Wiggins says.
“We’ve now got a foundation in place for banks and fintechs to start offering innovative, secure payment solutions to consumers, at scale.”
API Centre manager Phil Cass, who has led the centre’s work since its inception, says today is a milestone for the digital economy in Aotearoa.
“We’re continuing to work with the industry and regulators to lead open banking in Aotearoa and to help foster a thriving ecosystem. We’re excited to see banks and fintechs partnering and making the most of what’s been put in place, to innovate further and ultimately benefit consumers,” Cass says.
The API Centre will continue to work with banks over coming weeks to confirm compliance and resolve any outstanding issues related to implementation.
For more information on open banking and the API Standards, please visit the API Centre website here.
What is open banking?
Open banking refers to a system in which customers can make payments and instruct their banks to share their financial data, such as account information and transaction data, with third party providers like fintechs.
The safest and most secure way to share customer data is through standardised Application Programming Interfaces, or APIs. These allow two different systems (for example, a bank and a fintech) to safely communicate with each other and share information within a secured channel.
API standards are essential to open banking because they address concerns around security, privacy, and customer authentication and consent.
What is a payment initiation API?
Jointly developed by the API Centre in collaboration with industry, the Payment Initiation standard allows consumers to set up and make electronic payments by connecting directly and safely through a third party app or service to an API Provider, such as a bank.
This means that consumers can make payments from their own bank account through a third party app or service, without sharing their personal banking credentials.
Which third parties are using the payment initiation API?
Four fintechs, BlinkPay, Qippay, Volley and Worldline, currently have contracts in place with one or more banks to use the standardised Payment Initiation API.
There are another 13 third parties registered with the API Centre who will be able to approach all four of the banks to begin partnering discussions, from 30 May onwards.
What is the API Centre?
Working with the industry (from banks to startups), Payments NZ’s API Centre is co-designing Aotearoa’s open banking future by creating the framework that will ensure fast, secure, user-friendly data sharing – for all New Zealanders.
There are many open banking models around the world. Our framework creates a world-class foundation for businesses to provide leading, cost-effective products and services and give consumers confidence in how their data is accessed and shared.
The API Centre is governed by an API Council made up of representatives from across the industry. The API Council fosters a self-governing API standards service, and all Council members are required to act in the best interests of the API Centre.
What is the implementation plan?
The API Centre published its minimum open banking implementation plan on 30 May 2023.
The plan sets out timelines for the country’s largest banks to be operationally and technically ready to partner using the centre’s standards.
The Payments NZ Board and the API Council set the implementation plan after extensive industry consultation.
In addition to the 30 May deadline to implement the API Centre’s Payment Initiation v2.1 standard, ANZ, ASB, BNZ and Westpac NZ are subject to a deadline of 30 November 2024 to implement the Account Information v2.1 standard. This will enable customers to securely share their banking data with third party businesses of their choice, supporting a variety of services such as lending applications and budgeting tools.
Kiwibank is also included in the plan and has an implementation timeline to be live with both standards by May and November 2026.
Contact:
Sam Finnemore | [email protected] | 021 189 8150
Adam Warin | [email protected] | 021 029 01388