Next generation payments

Whakataukī

He pai te tirohanga ki ngā mahara mō ngā rā pahemo engari ka puta te māramatanga i runga i te titiro whakamua. 

It’s fine to have recollections of the past, but wisdom comes from being able to prepare opportunities for the future. 

Consultation on payments for the next generation 

In 2020, our Payments Modernisation Plan (PMP) set out the capability building blocks required to modernise the payments system in Aotearoa.  

We have since worked with the industry to develop a view of what a future payments platform for Aotearoa could look like, informed by expert insights from payment associations and vendors around the world. 

Building on this work, Payments NZ has now opened public consultation on potential next generation (next gen) digital payments infrastructure, to better meet the evolving needs of the economy, consumers and businesses. 

What’s happening 

We have a well-researched view on what a modern payments platform could look like in Aotearoa, detailed in our consultation paper – Consultation on payments for the next generation. 

We’re sharing this now so that industry, government and regulators and wider stakeholders can consider the future opportunities, foundational design and ecosystem roadmap, and provide feedback. 

The consultation process is now underway and will run through to March 2025. 

About next generation digital infrastructure 

Next gen digital payments capability could be a fundamental step change for payments in Aotearoa. It’s akin to upgrading our internet infrastructure from dial-up to ultra-fast broadband – which made it exponentially quicker to download, stream and share data and transformed how New Zealanders live every day. 

Typically, as we look around the globe, modern next gen digital payment systems are characterised by safer and more resilient payments capabilities, providing data-rich user experiences, enhanced end-to-end security and real-time account-to-account payments.   

We think the first step should be a small, centralised core payments capability that can be built out over time, in modules. Once this is in place, further capabilities that enhance safety and unlock new business value can be built. The proposed foundational design is modular, meaning new capability can be added in stages as needed without rebuilding what’s already in place. 

Potential next gen capabilities could include things like AI-powered fraud detection, instant notification of payments, data-driven information to help inform decisions, integrated reward schemes and useful business invoicing tools like request-to-pay. 

Why it’s needed 

There are many moving parts across the payments ecosystem, including things like the potential for a Central Bank Digital Currency, renewed discussions around digital identity, proposed changes to retail payments and the introduction of the Customer and Product Data bill.  

We want to check that we are on common ground with the shape of the next gen ecosystem we have in mind, and to capture opportunities to enable and link other workstreams and activities together. 

The current payment system in Aotearoa provides regular and reliable payments, but it won’t be able to serve all long-term digital economy and societal needs. In the long term, we want to combine meaningful data with financial transactions to create new, safer and more valuable payments capabilities for retail and standard consumer transactions.  

Improving accessibility and inclusion is also a key goal for a next gen system. A flexible digital platform can enable solutions developed by and for communities who currently face barriers when using the payments system.  

Examples of what’s possible might include digital experiences that meet specific needs for blind and low vision or neurodivergent users, or solutions that cater for the needs of Māori hāpori and enabling by Māori service providers. 

Who’s involved 

Payments NZ is leading the work alongside the industry on the next gen digital payments system for Aotearoa.  

Payments NZ has governed the country’s core payment systems since 2010, in partnership with industry and with the support of the Reserve Bank of New Zealand Te Pūtea Matua. It manages existing systems which safely transact over $7 trillion a year across the New Zealand economy. Payments NZ also enables more modern API enabled innovation and open banking outcomes through its API Centre.  

The Reserve Bank of New Zealand and the Commerce Commission Te Komihana Tauhokohoko are both supportive of the private sector leading on payments modernisation, including with a view to enhancing the retail payments system. 

Developing the proposed infrastructure requires coordination across the payments industry, spanning multiple organisations and legacy systems, including joint decisions about how and what to progress, and when, and funding arrangements.  

The consultation phase is important to continue to shape and evolve the work we’ve done so far, identify priorities and preferences, including understanding impact on stakeholder internal systems and potential delivery timing, before work can move forward to the next stage.  

About our consultation paper 

The consultation paper has been prepared in three chapters: 

Chapter 1 explores the broad benefits of payments modernisation. It also sets out regulatory oversight, governance, and management considerations as part of a model to build, maintain, and evolve the next gen framework. 

Chapter 2 proposes a modular foundational ecosystem design, meaning new capability can be added in stages as needed without rebuilding what’s already in place. 

Chapter 3 presents our proposal for building the next gen framework as an industry, including the proposed sequencing of capabilities, beginning with a focus on safer payments, and then adding other capabilities iteratively. 

Click here to read a summary of Consultation on payments for the next generation and download the full consultation paper.