What is Payments Direction?
Payments Direction is our cornerstone strategic initiative to understand the evolving future of payments. Through this programme we are working collaboratively with the industry to identify what needs to be done to contribute to and prepare for that future.
Our vision is to ensure New Zealand has the world’s most progressive payments system while making sure payments are simple and secure for Kiwis. Ultimately, we want Kiwis to be able to pay who they want, when they want and how they want. Payments Direction is the initiative that will help us achieve that vision. And we are proud that New Zealand is one of the few countries around the world where this type of long-term strategic initiative is being led and facilitated by the industry.
What are we working on?
For the first half of 2020, our work was focused on refreshing the Payments Direction roadmap and future view. We worked with an industry group to identify new and existing areas where we should focus our efforts. This will help us to build a roadmap and identify the programme's next priorities and initiatives over the medium term.
The result of this refresh is a Payments Modernisation Plan (PMP) discussion document, which identifies the capabilities required to modernise New Zealand’s payments ecosystem and deliver that future view. We’re now seeking input and feedback on this PMP from interested parties in the wider ecosystem who want to help shape the future of payments in New Zealand.
To facilitate this feedback process, we’ll be running online roadshows where people can learn more about the PMP. If you’re interested in attending one of these sessions and providing feedback on the PMP, register for one of our online roadshows.
Prior to this refresh work, we were focused on six areas across the payments ecosystem where the industry identified opportunities for improvement:
This workstream is investigating an industry-wide proxy identifier service. A proxy identifier service will allow a payment to be directed to an account without the account number. Identifiers such as a mobile number or email address could be used. For more detail about this workstream, see the Proxy identifiers page.
Speeding up systems
This workstream is looking at the speed of our payment systems and investigating whether transactions can be completed more quickly. For more detail about this workstream, see the Speeding up systems page.
Originally this workstream was focussed solely on the ISO 20022 messaging solution but has more recently been broadened to look at the range of ways informative transactions could be delivered. This shift in focus is a result of recent developments which have introduced a range of new options for the delivery of informative transactions through rich payments messaging.
This workstream will leverage work done in the ISO 20022 space in 2018 and previous research. It will investigate the strategic opportunity presented by informative transactions, and recommend next steps in this space.
For more information about this workstream, see the Informative transactions page.
The request-to-pay workstream will consider the establishment of request-to-pay functionality, which allows a payer to receive and execute requests for payments easily. For example, by simply approving a pre-populated bill payment.
We are continuing to work with stakeholders from across the industry, under the guidance of an industry advisory group, to investigate each of these areas as well as new opportunities to determine how they will evolve in this market.
Shared industry API framework (Completed)
This workstream investigated the establishment of common payments-related 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 is considering 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 from a strategic perspective and established as a project in the BECS work programme, for more information see the SBI365 page.
Why are we doing this work?
The financial services 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. In this environment, efficiency and interoperability are fundamental.
What work have we already done?
Our Payments 2025 report set out how the future of New Zealand’s payments ecosystem is likely to take shape and is a foundational document for the Payments Direction programme. The report identified that over the next 10 years we could expect the industry’s ecosystem to be shaped by: speed and availability of payments; the need for more informative transactions; increased collaboration in the industry; increasing involvement of regulators; simplification of processes; and internationalisation. It also identified five key areas of focus for ongoing strategic industry collaboration:
- Simple payments
- Fast (as) payments
- Informative transactions
- Just right regulation
- International payments
We undertake a yearly environmental scan to track changes and developments across our strategic areas of focus. Bi-annually, we produce an Envrionmental Scan research report outlining our findings.
How is the landscape changing?
The speed of innovation in the payments sector has led to new risks. Technology, such as the Internet of Things, the rise of the API economy, the proliferation of mobile devices, a more complex payments ecosystem, and increasing automation of payments, has changed the face of payments globally. It is imperative to ensure the safety and security of payments for New Zealand consumers, businesses and service providers, is protected as technology advances.
Collaboration is key
A core objective of Payments Direction is to work with and seek advice from the industry, our Participants and Members, and from across the wider ecosystem including interested parties, government and regulators. Since the launch of Payments Direction, we have engaged extensively with these groups and continue to do so.
We will also continue to keep an eye on the future to make sure we quickly identify other opportunities that could benefit from collaborative industry activity.
How we work
Payments Direction is an industry-led initiative and the way we work reflects this approach. In addition to our wider engagement activities, we work with representatives from a range of organisations who bring a variety of insights and perspectives to the work we do.
The Payments NZ Board is the governance owner for the initiative.
Working groups are comprised of Participant and Member representatives. They are tasked with investigating and progressing each initiative. Meeting frequently, they undertake detailed analysis and investigations, develop requirements, and produce recommendations for consideration by the industry.
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.