Q&As – payments 365 days a year
22 May 2023
What will this change mean for Aotearoa New Zealand’s payment system?
Banks currently send and settle payment transactions between each other only on business days (Monday to Friday). Moving to 365-day payments will extend the processing of electronic credit and direct debit payments to every single day of the year (including weekends and public holidays) starting from 26 May 2023.
Having 365-day availability will allow Kiwi to make and receive electronic payments between bank accounts, whether they’re at the same or different banks, every day of the year.
High value transactions, such as house settlements, will continue to operate under the existing ‘five business days’ model and will also not be affected by this move.
When will 365-day payments come into effect?
All banks who are direct settlement Participants in our Bulk Electronic Clearing System (BECS), which covers direct debits, automatic payments, bill payments and direct credits – are required to implement 365-day payment capability by 26 May 2023.
What do you mean by direct settlement Participants? Which banks are involved?
This project involves all the direct settlement banks who use our Bulk Electronic Clearing System (BECS). These are currently ANZ, ASB, Bank of China, BNZ, Citi, HSBC, ICBC, Kiwibank, TSB and Westpac. Collectively they offer financial services to most Kiwi.
What if my bank is not on that list?
Those who are not Participants in our BECS clearing system may still choose to offer this functionality to their customers, but this will be at their own discretion. Customers should check their bank's website for more information if they are not sure.
Will payments appear in a bank account immediately?
This change applies only to the days of the week you can make or receive payments. The exact time of day a payment transaction is received by you, or deducted from an account, can vary between banks.
Which payment types are included and why?
We’re currently focusing on extending service availability for electronic credits (bill payments, automatic payments, direct credits) and direct debit transactions.
High value transactions, such as house settlements, will not be affected. Payments to and from other countries will also not be affected. There are different considerations for processing those types of payments.
As a customer, what will happen to my automatic payments and direct debit payments? Will they go out on weekends and public holidays now?
Automatic payments are bank payments which are directly set up and controlled by you (the bank account holder). If you have automatic payments coming out regularly from your bank account, check now as your payments may come out on their actual due date, which may be a weekend or public holiday. You may wish to change the due date for these types of payments. More information about the switch to 7-day payments is also available on each bank’s website.
Direct debit payments are bank payments which are set up and controlled by businesses, such as a gym or utility company, for an amount agreed on with the customer. If you have direct debits coming out regularly from your bank account, these may now also happen on their actual due date, which may be a weekend or public holiday.
Any changes to direct debit dates should be discussed with the business who you set up the direct debit payment arrangement with.
What’s the difference between automatic payments and direct debit payments?
Automatic payments are bank payments which are directly set up and controlled by you (the bank account holder).
Direct debit payments are bank payments which are set up and controlled by businesses, such as a gym or utility company, for an amount agreed on with the customer.
What effect will this change have for businesses?
365-day payments can help improve business cashflow. It means commerce no longer has to wait for a traditional business day for a transaction to be completed. For example, if someone provides a service such as house cleaning or catering over weekends and public holidays, they can be paid into their bank account on that same day if the customer agrees to it. It could also provide Kiwi with more payment choice, enabling them to do things like pay for and collect goods purchased using their transactional account on non-business days.
Businesses will have an opportunity to look at ways to innovate within their business model when they have 365-day payment service availability.
As a merchant, does this affect the settlement of my EFTPOS transactions?
EFTPOS transactions will also be settled 365-days of the year including weekends and public holidays.
What effect will this change have on consumers?
The most noticeable change for the average Kiwi consumer will be the ability to receive as well as send electronic payments to and from their bank account to an account at a different bank any day of the year, regardless of weekends or public holidays. Banks will be in touch with their customers about this change as it is rolled out.
Why will it take until 26 May 2023 to implement?
Creating 365-day payment capability requires significant changes to core internal systems across multiple banks. It’s a major change to the way payments operate in New Zealand. This requires time, investment, development, and testing by multiple parties to their internal systems so the change can be implemented to the high standard expected by all Kiwi and ensure the continued safety and security of their transactions.
What’s the difference between 365-day payments and real-time payments?
365-day payments is about extending the processing of electronic payments to 365 days a year, including weekends and public holidays. This is different to “real-time” payments which generally means payments are made and received instantly (or as close to as possible) with the payment initiated, cleared and settled in a matter of seconds.
As part of Payments NZ’s Payments Direction programme, we’ve been working with the industry on a payments modernisation plan. A current focus of this work is to build out a detailed understanding of real-time capability and how it might fit into our long-term strategic roadmap.