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Direct Debit

A direct debit enables another party (the initiator), once authorised by you, to take payments from your nominated bank account electronically.

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Direct Credit

A direct credit is most often used by businesses to make batches of payments in one transaction.

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Automatic Payment

An automatic payment is an instruction from you to your bank to pay a fixed amount at a regular frequency from your nominated bank account to another party.

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Online Banking

Online Banking is accessed via a secure website and allows you to make payments and manage your accounts via the internet on your computer. Most banks also allow you to access online banking facilities via a mobile phone application.

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Phone Banking

Phone banking is accessed via a touchtone phone and allows you to make payments, transfer funds or speak to a banking consultant.

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Credit Cards

A credit card allows you to borrow money to make your purchases. Credit cards can be used to pay for goods and services at home and overseas or when shopping online.

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Debit Cards

A Debit Card allows you to electronically withdraw or deposit funds in your bank account.

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Same-day cleared payments (SCPs)

A same-day cleared payment is a payment to the nominated bank account of another party that cannot be revoked, dishonoured or reversed.

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Cheques

A cheque is a written instruction by you to your bank to pay a specific amount of money from your bank account to the person you have named.

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EFTPOS Cards

An EFTPOS Card allows you to electronically withdraw or deposit funds in your bank account.

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Payment Types

The information provided on payment types is of a general nature. Please contact your bank or visit their website for more detailed information including specific terms and conditions and any fees and charges that may apply.

 

Direct Debit

A direct debit enables another party (the initiator), once authorised by you, to take payments from your nominated bank account electronically.

The Benefits

A direct debit can be for a regular fixed amount (e.g. rates or insurance payments) or for variable amounts (e.g. power bill payments).

The initiator of the payment lets you know in advance the amount and date the payment will occur.

It reduces your administration and removes the possibility of overlooking (missing) a payment.

Things to keep in mind

Most bank accounts can be used for direct debits but certain savings and deposit accounts may not allow withdrawals.

 The initiator does all of the work to process the payment but you need to ensure there will be sufficient funds in your account on the due date, otherwise the payment may be dishonoured.

You need to let the initiator know if your bank account details change (e.g. if you switch banks).

Security

Establishing a direct debit generally requires your signed authorisation, although some initiators are permitted by their bank to accept online or phone authorisations.

You can cancel a direct debit authorisation at any time by contacting your bank and the initiator.

Direct Credit

A direct credit is most often used by businesses to make batches of payments in one transaction.

The Benefits

A direct credit can be used to make regular payments to a group of people (e.g. staff, suppliers or shareholders) and to pay many payments at the same time (e.g. wages, salaries, invoices, dividends).

You can make many outward payments and have only one transaction show on your account statement.

Things to keep in mind

The person you pay will need to let you know if their bank account details change (e.g. if they switch banks).

If you receive payment by direct credit you will see it as a deposit into your bank account.

Security

Paying money directly into the account of the person you are paying is more secure than giving them cash or a cheque.

Automatic Payment

An automatic payment is an instruction from you to your bank to pay a fixed amount at a regular frequency from your nominated bank account to another party.

The Benefits

Automatic payments are useful when making regular payments for the same amount. (e.g. rent, subscriptions, charitable donations or transfers into a savings account).

It is a 'set and forget' type of payment that will continue until the final payment date is reached (if set) or you cancel it.

It reduces the possibility of overlooking (missing) a payment.

You can choose the frequency of the payment (e.g. weekly, fortnightly, monthly, etc) which can be when your wages or salary is due to be paid so you know you will have sufficient funds in your account when the payment is due.

If you need to stop an automatic payment temporarily it can be suspended for a short period and restarted, rather than having to cancel and re-establish it.

Things to keep in mind

An automatic payment authority form can be obtained directly from any bank or via their website, but you can set up an automatic payment yourself via online or phone banking.

If the payment amount and/or the frequency is variable, it is generally better to make your payment by online or phone banking, or use direct debit if the option is available.

If you receive payment by automatic payment you will see it as a deposit into your bank account

 

Security

If the bank receives an automatic payment form they will only establish it if has been signed by you or someone else that has authority to do so.

You can amend or cancel an automatic payment at any time via online banking or by contacting your bank.

 

Online Banking

Online Banking is accessed via a secure website and allows you to make payments and manage your accounts via the internet on your computer. Most banks also allow you to access online banking facilities via a mobile phone application.

The Benefits

Online Banking is secure and relatively simple to use and secure, and banks readily assist anyone who is new to online banking to get up and running.

Payments can be made at any time without the need to go into a bank, post a payment, or drop it off to the recipient.

Payments can be set up in advance so you don’t need to do it on the due date.

 

Things to keep in mind

You need to ensure there will be sufficient funds in your account on the due date to ensure the payment is successful.

When making regular payments to some organisations you may need to first establish them as a Pre-Selected Bill Payee through your bank. This way your reference or customer information can be pre-populated to ensure your payment is applied correctly.

If you receive payment by online banking you will see it as a deposit into your bank account.

Security

You will need to enter your username and password before you can access online banking. Some banks also ask for a second password or provide their customers with a token or security card detailing a series of numbers and/or letters that changes each time you log-in.

The system checks the branch and account details to ensure they are valid each time a account number is entered (it can't tell if the account is open or the name of the account holder).

Banks generally have transaction limits in place that restrict the size of any individual transaction.

 

 

Phone Banking

Phone banking is accessed via a touchtone phone and allows you to make payments, transfer funds or speak to a banking consultant.

The Benefits

Contact centre staff are available to assist you 24 hours a day 7 days a week via a domestic toll free number.

Phone banking can be used for making regular bill payments to pre-established organisations (such as utilities, councils, insurance companies) for account enquiries and for transferring funds between your own accounts.

 

Things to keep in mind

When making regular payments to a specific payee you need to first establish them through your bank as a Pre-Selected Bill Payee. This way your reference or customer information can be pre-populated to ensure your payment is applied correctly.

Security

You generally need to enter your customer number and a Personal Identification Number (PIN) before you can access your account and transactional services via phone banking.

Contact centre staff may ask you additional security questions to confirm your identity when dealing with them via phone banking.

 

EFTPOS Cards

An EFTPOS Card allows you to electronically withdraw or deposit funds in your bank account.

The Benefits

An EFTPOS Card allows you to access available funds in your transactional accounts to make purchases using EFTPOS so you don’t need to carry so much cash around.

An EFTPOS Card may help manage your spending as you must have sufficient funds available in your nominated account to make a purchase.

An EFTPOS Card can be used at many retailers in New Zealand to obtain cash at the same time as paying for purchases.

You can also use an EFTPOS Card to withdraw cash from your account via an ATM.

EFTPOS Cards can only be used in a face-to-face environment and cannot be used to make purchases online or by phone.

Things to keep in mind

Banks will generally accept responsibility for fraudulent transactions on your EFTPOS Card unless the card holder disclosed, or did not keep safe, their Personal Identification Number (check your bank’s terms and conditions).

EFTPOS Failover Systems

The New Zealand EFTPOS system is designed to process payments on a 24/7 basis. However, technical problems such as telecommunication or system outages can occasionally prevent EFTPOS transactions from being processed. In these instances, the merchant is able to use the Manual Offline Voucher (MOV) or Electronic Offline Voucher (EOV) process to complete the EFTPOS transaction.

MOV is a manual, paper-based process used to record the transactions details that are later entered into the payment system. This process can take up to 10 days to complete.

Over time EOV has become the preferred method for processing transactions when the EFTPOS system is unavailable. EOV enables the transaction details to be stored electronically in the terminal and process the payment once the system becomes available.

Further information regarding failover systems for EFTPOS is available from ANZ, ASB, BNZ, Kiwibank and Westpac.

Security

A PIN is usually required to be entered when you make a transaction using your EFTPOS Card.

An EFTPOS Card is safer than carrying large amounts of cash.

Debit Cards

Like an EFTPOS card, a Debit Card allows you to electronically withdraw or deposit funds in your bank account.

The Benefits

A Debit Card allows you to access available funds in your transactional accounts to make purchases using EFTPOS so you don’t need to carry so much cash around.

Unlike an EFTPOS Card, some debit cards, including those issued by Visa and MasterCard, can also be used to make purchases online or by phone.

A Debit Card may help manage your spending as you must have sufficient funds available in your nominated account to make a purchase.

A Debit Card can be used at many retailers in New Zealand to obtain cash at the same time as paying for purchases.

You can also use a Debit Card to withdraw cash from your account via an ATM.

Things to keep in mind

Banks will generally accept responsibility for fraudulent transactions on your Debit Card unless the card holder disclosed, or did not keep safe, their Personal Identification Number (check your bank’s terms and conditions).

Security

A PIN is usually required to be entered when you make a transaction using your Debit Card.

A Debit Card is safer than carrying large amounts of cash.

Credit Cards

A credit card allows you to borrow money to make your purchases. Credit cards can be used to pay for goods and services at home and overseas or when shopping online.

The Benefits

No interest is payable (except on cash advances) when a credit card balance is paid in full monthly. This makes credit cards a useful way to borrow over short periods (30 days or so).

Credit cards can be useful in emergencies, allowing ‘instant access’ to a borrowing facility (by cash advance) up to a pre-agreed credit limit.

Credit cards may also allow you to earn reward points based on how much you spend on your card.

Things to keep in mind

Credit card purchases overseas can be subject to currency conversion before the transaction appears on your statement, although some overseas merchants allow payment in the currency the card was issued in so you know exactly how much you will need to pay to your bank later.

You should be mindful of the 'approximate' exchange rate when making purchases overseas or via overseas websites to keep within your card’s limit.

If you don’t pay the full amount each month you will be charged interest on top of the amount you borrowed. A cash advance incurs interest from the date of the withdrawal.

Some smaller retailers may not accept payment by credit card.

Security

If a credit card is lost, stolen, or compromised you can contact your card issuer to stop all further transactions on the card. Refunds for fraudulent transactions can also be obtained (refer to the issuer’s specific credit card terms and conditions for details).

When paying in person you will usually be asked to enter your Personal Identification Number (PIN) or sign to authorise the payment.

Banks monitor customer credit card spending trends and transactions. If there are transactions on your card that appear 'unusual' your card issuer may contact you to check your usage to protect you (and them).

A credit card is safer than carrying large amounts of cash.

 

Same-day cleared payments (SCPs)

A same-day cleared payment is a payment to the nominated bank account of another party that cannot be revoked, dishonoured or reversed.

SCPs are commonly used for major purchases, such as property settlements, vehicle purchases, or other large value transactions where the person receiving the payment requires a confirmed payment that business day.

The Benefits

The person receiving the payment has surety of payment knowing that it will not subsequently be dishonoured for lack of funds.

The payment will be credited to the account number provided usually within one hour of the payer’s account being debited.

If requested, an email notification can be sent to the person receiving the payment confirming that the funds have been credited to their bank account.

Things to keep in mind

A same-day cleared payment can be arranged by contacting your bank. You can make a same-day cleared payment online at some banks.

You must have sufficient funds in your account before the same-day cleared payment is made.

If you receive a same-day cleared payment you will be able to use the funds immediately.

Security

Same-day cleared payments cannot be revoked, dishonoured or reversed and are available for immediate use.

Cheques

A cheque is a written instruction by you to your bank to pay a specific amount of money from your bank account to the person you have named.

The Benefits

You don’t need to know the bank account number of the person you want to pay by cheque.

Cheques can be mailed to the person or organisation you want to pay.

You don’t need funds in your bank account when you write a cheque (but you MUST have enough funds in your account to cover the cheque when it is deposited by the person you want to pay).  

Things to keep in mind

Normally cheques take a few days to be paid. However the person to whom the cheque is made out may ask for a “special answer” from the payer’s bank for quicker payment.

If you’ve paid someone by cheque you need to remember to leave enough funds in your account to cover it, as there can be a time-lag before a cheque is deposited.

Not everyone accepts cheques as payment as they can sometimes dishonour (i.e. not be paid by your bank). Before paying by cheque it’s always worth ensuring the recipient accepts cheques.

If you receive payment by cheque you will need to take it to your bank to deposit it and it may take a few days before you can use the funds.

Books of cheques are available from your bank for certain bank accounts.

 

Security

You can request your bank to stop payment of a cheque if it is lost, stolen or not received by the intended recipient but this must be done before it’s paid by your bank

Cheques are verified by the bank before they are paid for correctness (e.g. to ensure they have been signed in accordance with the account operating authority and the amount in words and figures agree).

 

 

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