Payments Direction

What is Payments Direction?

Payments Direction is our cornerstone strategic initiative to understand the evolving future of payments. Through this programme we work collaboratively with the industry to identify what needs to be done to contribute to and prepare for that future.  

Our vision is for world class payments for Aotearoa New Zealand. Ultimately, we want New Zealanders to be able to pay who they want, when they want and how they want. Payments Direction is the strategic initiative that is helping us work towards achieving that vision.

What have we been working on?

Our focus this year has been to understand what role real-time capabilities would play in modernising Aotearoa’s payments system. The outcome of this work enables us to continue to progress work on our long-term strategic roadmap for the core payments system through to 2030. This work is based on the Payments Modernisation Plan (PMP) discussion document we released in 2020.

The feedback we received from the industry on the PMP in 2021 reinforced a need to understand what role real-time capabilities would play as part of any modernisation plan, given their role as a cornerstone building block. This initial focus on real-time aligns with a global trend towards real-time payment infrastructures and capabilities.

In late 2021, we ran a market information gathering exercise to help build out a detailed understanding of real-time capability, what that could look like for Aotearoa, and how it should fit into our strategic roadmap.

We received a good response to the market information gathering exercise, with insightful information provided by a number of organisations with experience delivering real-time payments capabilities around the world.

The approaches suggested by respondents were assessed and feedback received on this work has helped to inform the real-time engagement we will undertaking in the coming months.

We have also been working to update our 2020 Consumer Research.

What do we mean by real-time capability or payment?

When discussing real-time capability, we are referring to the underlying systems and capability which enable people and organisations to make an account-to-account payment where funds transfer from the sender to the receiver almost immediately (in seconds), 24/7/365.

What are we working on next?

Our work to date identified the need for potential users of a real-time system to have an opportunity to have their say on the development of real-time capability.

We will shortly be issuing a discussion document exploring the work we have completed to date and inviting feedback on how best to progress real-time capability for Aotearoa. We are also working to design a framework that will help to develop the processes and structures needed to guide decision making should we progress to a formal real-time programme.

To find out more visit our Real-time payments page and complete our expression of interest form to receive the discussion document.

The information collated as part of our real-time engagement will help to further shape the strategic roadmap we’re developing for modernising Aotearoa’s payments system. We’ll keep you updated about this work as it progresses, so if you’re interested in being kept informed, please join our mailing list for news and updates.

What work have we done so far?  

2022 Environmental Scan Report

Each year we undertake an environmental scan to track changes and developments across strategic areas of focus for the payments industry to help guide decision making, and every second year we publish a report of those findings. In our 2021 scan we observed overlap and convergence between the themes as our physical and digital worlds merged and payment technologies became increasingly connected to other digital capabilities. Those of you familiar with previous scans will notice a significant change in the nature of the themes we touch on in our 2022 scan. Our new themes now reflect the current broadening landscape of payment developments.

This year, we have also introduced a section in the scan looking at key developments in Aotearoa. These developments are very much in step with the rest of the world, which demonstrates that the work being done by the ecosystem here in Aotearoa continues to head in the right direction.

Payments Modernisation Plan Discussion Document

The PMP is based on five guiding principles that put Kiwi at the heart of everything we do. The principles that guide our modernisation activities are to:

• help Kiwi achieve their financial goals
• improve financial inclusion
• build a more productive Aotearoa
• improve the financial resilience of Kiwi businesses and consumers
• support competition and innovation to give Kiwi more choice in payments.

The PMP also identifies a range of capability building blocks that will be required to modernise Aotearoa’s payments ecosystem. Each of these building blocks has the potential to address current or emerging limitations in the payments ecosystem and play an important part in delivering a vibrant and dynamic future payments ecosystem.

Once we have completed work to understand what real time payments could look like in an Aotearoa New Zealand context, we’ll be in a position to further consider our Payments Modernisation Plan and strategic roadmap.

Consumer Research 2020

In 2020 we also conducted consumer research to understand what Kiwi consumers think about Aotearoa’s current payments system, how Kiwi consumers are making payments and might expect to pay into the future, and what’s important to them when thinking about the future of payments.

Shared industry API framework (Completed)
This workstream investigated the establishment of open banking API standards and a shared API framework which outlined how organisations can access, use, and contribute to the development of those standards. This workstream has now concluded with the release of version 1.0.0 of our pilot API standards and establishment of our API Centre. 

365-day service availability (Completed)
This workstream considered an extension to the availability of payment systems to allow payments, for example direct credits or bill payments, to be made and received 365 days of the year.  This workstream has now been completed with the successful transition of the industry to 365-day payments.

Working Group Investigations

In addition to the workstreams above, Payments Direction working groups have also previously considered other key components of a future payments roadmap including:

• The ability to direct a payment without knowing the recipient’s account number.
• The sending of richer information with a payment (for more information on work the industry is currently doing in this regard, read the ISO 20022 project information).

Our previous work will also feed into the modernisation plan and inform our future strategic roadmap.

Why are we doing this work? 

The financial services sector and payments industry continues to evolve at a rapid pace. Therefore, it's vitally important for organisations and the industry to stay informed about the developments driving this evolution and ensure they're prepared for the future. This is particularly true for the payments industry, which is highly networked and open to the adoption of new technologies and business models. In this environment, efficiency, safety, innovation, openness and interoperability are fundamental.  

How we work

Payments Direction is an industry-led initiative and the way we work reflects this approach.

Facilitation and collaboration are key features of the Payments Direction programme. As such, we work with our Participants and Members and interested parties, government and regulators across the wider ecosystem who each brings a variety of insights and perspectives to the work we do. 

The Payments NZ Board is responsible for governing the programme and its initiatives. 

Our working groups are comprised of Participant and Member representatives. They are tasked with investigating and progressing this work. Meeting frequently, they undertake detailed analysis and investigations, develop requirements, and produce recommendations for consideration by the industry and Payments NZ Board. 

Want to know more or get involved?

If you work at one of our Participant or Member organisations, it's likely you have colleagues connected to or working directly with this programme. Ask your colleagues about how you can get involved, or contact us.

If you are part of the wider payments ecosystem and want more information or to get involved, please feel free to contact us.