What is Payments Direction?
Payments Direction is our cornerstone strategic initiative set up in 2015 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?
We are focused on six areas across the payments ecosystem where the industry has identified opportunities for improvement. The areas we are working together with the industry on are:
Shared industry API framework
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. In the coming months, we’ll be opening an API standards service where people can apply to become registered standards users. For more detail and background, see the API workstream page.
365-day service availability
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. More detail about this workstream, see the SBI365 page.
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 has close links with the common API framework and will be kicked off following the delivery of the API pilot and framework. It 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.
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
Our early research includes a 2015 Environmental scan and 2015 Consumer insights report. We checked in on our original environmental scan in 2016 producing our Environmental scan refresh report, and expanded further on that in our 2017 Environmental scan. We also commissioned a further consumer insights report in early 2017. We recently released our 2018 Environmental scan refresh. The updated research added two further factors that were likely to shape our future ecosystem: payments ecosystems becoming ever more diverse, and increasing concern around payments security.
We will continue to keep abreast of these trends and strategic issues as they arise.
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 are working with a number of industry working groups, an industry advisory group and our Board Strategy Sub-Committee, to frame up and investigate the viability of each of the six opportunities. No decisions have been made yet on implementation of any opportunity, as that happens we will provide updates.
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. There are four key groups that we work with closely, the Payments NZ Board, Board Strategy Sub-Committee and Payments Direction Industry Advisory Group and working groups.
The Payments NZ Board is the governance owner for the initiative. The Board Strategy-Sub Committee provides strategic oversight and assurance to the Board, programme and wider industry. The committee is chaired by an Independent Director.
Each initiative has its own working group, comprised of Participant and Member representatives. Working groups 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.
Who we work with
Industry Advisory Group (IAG): The IAG is made up of representatives from across our Participant and Members. They bring an all-of-industry view to our work and provide quality assurance, advice, and input into working group recommendations and outputs. The IAG was set up to provide advice from a broad range of organisations specifically to the Payments Direction programme.
Our IAG has representatives from ACI Worldwide, ANZ, ASB, BNZ, Citibank, Datacom, FIS Global, Foodstuffs, HSBC, Intellect Design, Kiwibank, Merco, Paymark, Rabobank, Trade Me, TSB, Visa, and Westpac.
Industry working groups: The engine room of Payments Direction, these groups are a cross-section of people from across the industry who focus is on investigating areas of opportunities and workstreams.
Board strategy sub-committee: This committee is made up of a board of directors with an independent director as chair and was set up to provide governance oversight for the Payments Direction programme. The committee also provides advice, endorses outcomes from working groups and the IAG, and makes recommendations to the Payments NZ board.
Want to know more or get involved?
You can find out more about our workstreams in our new working group journal which contains regular updates of high level activity within the programme.
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.