How does a next generation payments ecosystem benefit Aotearoa?

A next generation payments ecosystem is about much more than the ability to transfer money between parties (e.g., between consumers and businesses) within seconds. It is about delivering a broad set of capabilities that, when combined with other initiatives like open banking, can be leveraged to: 

  • Create new customer experiences and services.
  • Improve the financial literacy and wellbeing of New Zealanders.
  • Support higher economic growth and improved social outcomes for New Zealanders.
  • Support environmental, social and governance (ESG) aspirations.
  • Strengthen the safety and security of payments, especially in relation to fraud prevention.
  • Play a critical role in Aotearoa’s ambitions to become a world-class digital economy.

What does a next generation, modular, payments system look like?

Next generation payments systems have extensibility at their core, which supports current and future ecosystem requirements without having to fundamentally re-architect core infrastructure.​ They:

  • Are characterised by their smaller centralised core, with a wide range of features, functionalities and schemes layered on top.
  • Offer cost-effective methods of delivery of capability at the platform level to allow services, such as real-time fraud detection and Anti-Money Laundering (AML) checks for customer onboarding, to be made available with less integration effort and improved economies of scale.
  • Can be progressively delivered, offering the ability to develop a roadmap which is built out over time using a layered approach.
  • Create an ecosystem that can be delivered via a mix of industry activity and independent competitive offerings, enabling a broader range of participants to develop value-added products and services.

The centralised ‘right-sized’ core platform offers extensibility so developers of products and solutions can connect to the core and make use of its functionality, enabling a broader range of use cases and the delivery of innovative product offerings, while continuing to deliver the payment services available today.​

This building block approach means different payment types and services can be re-used and combined in new ways to support innovative product development. This also provides flexibility to adapt to emerging innovations as they are developed, such as a future central bank digital currency (CBDC).

This supports the delivery of modern real-time payments capability that is safe and cost effective in a way that maximises the opportunity for ecosystem participation, utilisation and innovation.

What is the timeline for delivery of a next generation payments ecosystem?

Led by Payments NZ, the delivery of a next generation payments ecosystem is a multi-year exercise, requiring active input throughout from many industry stakeholders. We've recently finalised the first two chapters of our industry strategic investment case, which will help support our conversations with stakeholders.

These conversations will help to determine the design and priorisitsation of capabilities delivered by a next generation payments ecosystem and provide a better understanding of the demand for these capabilities in Aotearoa.

We expect to provide the industry with the information required for them to make a decision to commit to delivery of a next generation payments ecosystem by March 2024.

What is the Payments Modernisation Plan?

The Payments Modernisation Plan (PMP) is a discussion document which sets out a future view of the payments ecosystem by 2030 and identifies nine capability building blocks required to deliver that view.

The PMP was the first step in producing a strategic roadmap for payments modernisation that would determine when those capability building blocks are expected to be delivered and in what order.

Why is real-time capability the cornerstone of our modernisation efforts?

The feedback we received from the industry on the PMP confirmed real-time capability should be the cornerstone of our payments modernisation efforts, due to the ability to enable the other capability building blocks identified in the PMP.

This initial focus on real-time aligns with a global trend towards implementing real-time payment infrastructures and capabilities.