Next generation payments

Our next generation payments strategic initiative has been driving conversations about how the payments industry could support better outcomes for Aotearoa and New Zealanders by improving the nation’s digital payments capability. Through industry collaboration, research and engagement with leading advisors, we have examined opportunities to modernise the core payments system and establish the foundations for future capability development. 

We identified ecosystem modernisation opportunities as part of Payments Direction in 2015 – including open banking APIs, SBI365 (7-day payments), proxy identifiers and ISO 20022. We undertook an assessment of opportunities in 2017, and a key resulting deliverable was the establishment of the Payments NZ API Centre in May 2019, establishing open banking in Aotearoa. 

Under this initiative, we have also delivered: 

• An industry-led Payments Modernisation Plan (2020) 
• Consultation on payments for the next generation (2024 – 2025)  
• Next generation payments recommendations report (2025) 
• Next steps for the industry  

Explore the journey of this initiative, from its foundations through to the current priorities and future opportunities shaping payments in Aotearoa. Through this work, we have built a strong case for modernisation, grounded in industry collaboration, consumer needs, and the opportunities ahead.

In 2020, we published our Payments Modernisation Plan (PMP), setting out a vision of the payments ecosystem and the building blocks required to get there. 

Our PMP was based on five guiding principles for modernisation that put New Zealanders at the heart of everything we do. We set out to:  

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

The PMP also identified a range of capability building blocks that would be required to modernise the payments ecosystem across Aotearoa. 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. 

Since the release of the PMP we have continued to advance many of the core building block capabilities we identified. This includes:  

Value added applications, greater payment choices, and secure partnering   

The work of our API Centre supports bringing value added open banking applications and greater payment choices into the ecosystem safely and securely.   

Richer data through ISO 20022 

We led the industry’s phased transition to SWIFT’s ISO 20022 messaging standard. This created a common language and model for data in the context of high value and cross-border transactions.   

Shared industry API framework

We established shared open banking API standards and a common framework for how organisations can access, use and contribute to those standards. It concluded with the release of version 1.0.0 of our pilot API standards and the establishment of our API Centre. 

365-day service availability 

We explored extending the availability of payment systems so payments, including direct credits and bill payments, could be made and received every day of the year. It was delivered in 2023, when the industry successfully transitioned to 7-day bank-to-bank digital payments. 

Following the release of the Payments Modernisation Plan (PMP) in 2020, we worked with industry participants, stakeholders and international experts to explore how the payments ecosystem in Aotearoa could evolve to meet future needs. Through a series of industry-led discovery activities, market engagement and design assessments, we examined global approaches to payments modernisation, emerging technologies and the capabilities required to support a more innovative, interoperable and data-rich ecosystem. 

This work helped shape a preferred modular approach to modernisation, recognising that new capabilities could be introduced progressively while building on the strengths of existing infrastructure. The approach provided a pathway for the industry to improve payments capabilities over time, supporting innovation, reducing transition risk and enabling greater flexibility as customer and market needs evolve. 

This initiative established the foundations for our consultation on payments for the next generation, helping shape the priorities, recommendations and future opportunities that continue to guide the industry’s payments modernisation efforts today.

Building on the foundations established through our Payments Modernisation Plan and industry discovery work, we launched a public consultation on payments for the next generation in September 2024. The consultation sought views from across the payments ecosystem on how payments infrastructure in Aotearoa could continue to evolve to meet the future needs of consumers, businesses and the wider economy. 

The consultation paper brought together several years of research, industry engagement and international insights, presenting a proposed design for a future payments ecosystem centred on safe, secure, interoperable and data-rich payments. It also outlined a high-level roadmap for how future capabilities could be introduced over time, providing a starting point for industry discussion rather than a fixed implementation plan. 

Who did we engage with?  

Throughout the consultation process, we engaged with: 

• Participants 
• Members 
• Regulators 
• Government agencies 
• Payment service providers 
• Community organisations 
• Businesses 
• Individuals with an interest in payments 

Through this engagement, we were able to better understand priorities, opportunities and concerns. Workshops, working groups and stakeholder engagement activities helped ensure a broad range of perspectives informed the discussion and future direction of the programme. 

Our public consultation on payments for the next generation set out our thoughts on how a next generation ecosystem could come together, including a proposed design centred on safe, interoperable, data-rich payments.  

The feedback we received demonstrated strong support for a modern, world-class payments ecosystem that balances innovation with safety, accessibility and interoperability. It highlighted the importance of coordinated, industry-wide approach to modernisation, supported by clear sequencing, transparent governance, strong data foundations and future-focused infrastructure investments.  

We compiled the feedback into a recommendations report, summarising the key findings from our consultation. There were five strategic recommendations that continue to guide our work today. These are: 

• Developing a consolidated strategic roadmap   
• Taking a modular approach to capability development 
• Greater focus on foundation ecosystem capabilities 
• Explore the potential of digital identity to make payments safer  
• Integrate next generation capabilities into the consolidated strategic roadmap  

Broadly speaking, the feedback confirmed strong support for a modern, world-class payments ecosystem that is safe, secure, interoperable and data-rich, with accessibility and inclusion embedded by design. Stakeholders highlighted the importance of strong foundations such as governance, data standards, digital identity and shared services, alongside a clear and coordinated roadmap for future capability development. The feedback further reinforced the value of a staged, modular approach to modernisation.  

To guide us in shaping future initiatives, we have put together an industry-led Payments Direction Strategy Group to explore strategic ecosystem challenges and opportunities. We’re also progressing a more integrated approach to industry modernisation activities that provides a stronger foundation for investment and sequencing decisions, and engagement with the Reserve Bank of New Zealand – Te Pūtea Matua’s modernisation programme. 

We’re currently working on developing a future-focused view of how payment systems, payment instruments, future real-time capabilities and common ecosystem capabilities should work together as a connected payments ecosystem. 

A cohesive ecosystem that supports resilience, innovation, efficiency, good customer outcomes and sustainable propositions benefit all of Aotearoa. Our key focus areas now include: 

• Developing a future ecosystem view that considers the interaction between payment instruments, clearing systems, common capabilities and emerging infrastructure.  
• Evaluating the optimum mix of payment instruments and capabilities required to meet the needs of consumers, businesses and the wider economy. 
• Developing a long-term view of the role our existing clearing systems should play as the payments ecosystem evolves and future real-time capabilities emerge. 
• Identifying practical approaches to sequencing and transition that support sustainable and coordinated change. 
• Building industry alignment around key priorities, dependencies, trade-offs and future choices.