New Zealand trials open banking
Governance organisation Payments NZ has unveiled an industry API pilot to test open banking and digital payments in New Zealand.
The pilot will be conducted by six partners – ASB, BNZ, Datacom, Paymark, Trade Me and Westpac – a mix of banks and third parties. They will build and test two payment-related API standards.
Steve Wiggins, CEO of Payments NZ, says it wants to “ensure the safety and security of the payments system and the information being shared” and will take a “balanced approach” to test the viability of these APIs.
The APIs being tested are account information and payment initiation. The first one will enable the verification of account details and funds, and the latter will enable payments by connecting directly with the user’s bank.
According to Payments NZ, both APIs were chosen to be piloted because they have the “greatest potential to ease the process of digital transactions for the benefit of consumers, businesses and service providers”.
The APIs have been adapted and modified from the UK’s open banking API standards for local market conditions.
Alongside the pilot, Payments NZ says an industry working group is designing a framework within which the APIs could operate. The outputs and practical insights from the pilot will feed into the design of the framework.
Payments NZ says its research into global changes and local needs began in 2015, and a plan for investigating the shared API framework opportunity commenced in early 2017.
During this time, Payments NZ has been working with industry and interested parties, including regulators, to ensure its initiatives take into consideration wider ecosystem developments.
The pilot is expected to be completed late in 2018. It is part of a wider programme of industry activity to improve the nation’s payments system.