Open banking in Aotearoa New Zealand is taking a major
leap forward, with the four largest banks, ANZ, ASB, BNZ and
Westpac NZ, implementing another key industry standard that
enables payments service providers and fintechs to offer
new, more flexible payment options to their
customers.
Version 2.3 of the Payment Initiation API
standard for open banking, developed by Payments NZ’s API
Centre, is due for implementation today, marking the third
milestone under the industry’s minimum open banking
implementation plan.
The most significant upgrade in
this standard is the introduction of mandatory support for
enduring payment consent – a critical function sought by
the industry.
Enduring payment consent allows
customers to make repeat payments automatically from their
own account through third-party services, authorised through
their online banking app or
portal.
Customers can authorise payments
to happen automatically under a set limit. If a charge comes
through above the limit, a notification alerts the customer
to review and approve the payment before it goes
through.
The API Centre is currently
working with the four banks to confirm final implementation.
Kiwibank is also on track to implement the standard ahead of
a separate milestone date, at the end of May
2026.
Phil Cass, Payments NZ’s API Centre Manager,
says the new standard is a “game changer” that puts
Aotearoa ahead of international peers in open
banking.
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“Having this latest version of the standard
across our four biggest banks is a big step forward for
industry participants who want to offer new and improved
payments experiences for customers,” Cass
says.
“We are proud of the API Centre’s work and
seeing the industry collaborate to deliver the latest
payments initiation standard which reflects global best
practice while being tailored to meet the needs of
Aotearoa.
“This is a significant step forward that
supports new innovation and makes world-class open banking a
reality for New Zealanders,” Cass adds.
The
implementation milestone comes as MBIE prepares regulations
for open banking under the Customer and Product Data Act,
passed earlier this year.
“We see the Act as a
positive step forward, and we’re committed to working with
MBIE to achieve a sustainable open banking ecosystem that
finds the right balance between regulation and industry led
,” Cass says.
“Open banking is here, and customers
are using it. We look forward to continuing to champion
industry-led developments and building on the results it’s
delivering for Aotearoa.”
The
implementation milestone will feature in a broader API
Centre celebration event in Auckland mid June, reflecting on
six years of progress and highlighting what’s next for
open banking in Aotearoa under the emerging CPD
framework.
The event will also see the
launch of Ngā Tohu Ārahi, the API Centre’s Data
Handling Guidelines – developed in partnership with Māori
data experts and grounded in Māori Data Governance
framework and principles.
“This is about more than a
standard – it’s about the evolution of an ecosystem,”
says Cass. “Together with banks, the wider industry,
regulators and Māori data experts, we’re helping shape
the future of payments and data sharing in a way that
reflects the values and priorities of Aotearoa.”
For
more information on open banking and the API Standards,
please visit the API Centre website here.
Note:
What
is open banking?
Open banking is a system
that lets customers safely share their financial data –
like account balances and transaction history – with
trusted third parties such as fintechs. It also enables
customers to make payments directly from their bank accounts
through these services.
This is made possible through
standardised Application Programming Interfaces (APIs),
which act like secure digital bridges between banks and
third parties. APIs allow different systems to talk to each
other and exchange information in real time, within a safe,
controlled environment.
API standards are the backbone
of open banking. They ensure that data is shared securely
and transparently, with clear rules around customer consent,
authentication, and privacy protection – putting customers
in control of who can access their information and for what
purpose.
What is the payment initiation API
standard?
Jointly developed by the API Centre in
collaboration with industry, the Payment
Initiation API standard allows consumers to set up and
make electronic payments by connecting directly and safely
through a third party app or service to an API Provider,
such as a bank.
Instead of sharing login credentials,
customers connect securely to their bank via an API –
keeping their data private and the transaction
protected.
The four largest banks in Aotearoa – ANZ,
ASB, BNZ and Westpac NZ – implemented version 2.1 of the
standard ahead of an industry milestone set by Payments NZ
in May last year, marking a major step forward in open
banking readiness.
What’s new in the upgraded
standard?
Version 2.3 of the Payment Initiation API
standard introduces several important upgrades that
strengthen open banking capability and consistency across
the ecosystem.
For the first time, API Providers
(banks) are required to support key functions that were
previously optional – giving data requestors confidence
that these features will be reliably available when
integrating with banks.
One of the most
significant changes is the introduction of mandatory support
for enduring payment consent. This allows customers to
authorise repeat payments from their bank account to a third
party under agreed limits – a potential modern alternative
to direct debit, with greater transparency and
control.
Another major enhancement is
mandatory support for decoupled authentication. This lets
customers initiate an action on one device (like a laptop)
and securely complete the payment authorisation on another
(such as their banking app on a mobile phone), improving
convenience and user experience.
An
overview of the v2.2 and v2.3 standards can be found
here.
Which third parties are using the payment
initiation API?
Five fintechs – BlinkPay, Qippay,
Volley, Wych and Worldline – currently have contracts in
place with one or more banks using either v2.1 or v2.3 of
the standardised Payment Initiation API.
There are a
further 22 third parties registered with the API Centre who
will be able to approach all four of the implementing banks
to begin partnering discussions based on the v2.3 standard
from 30 May onwards.
What is the API
Centre?
Working with the industry (from banks to
startups), Payments NZ’s API Centre is co-designing the
open banking future of Aotearoa, by creating the framework
that will ensure fast, secure, user-friendly data sharing
– for all New Zealanders.
There are many open
banking models around the world. Our framework creates a
world-class foundation for businesses to provide leading,
cost-effective products and services and give consumers
confidence in how their data is accessed and
shared.
The API Centre is governed by an API Council
made
up of representatives from across the industry. The API
Council fosters a self-governing API standards service, and
all Council members are required to act in the best
interests of the API Centre.
What is the
implementation plan?
The API Centre first published
its minimum
open banking implementation plan in May 2023, and
updated it in October 2024.
It sets out timelines for
the country’s largest banks to be operationally and
technically ready to partner using the API Centre’s open
banking standards.
The Payments NZ Board and the API
Council set the implementation plan after extensive industry
consultation.
Under the plan, ANZ, ASB, BNZ and
Westpac NZ implemented the Payment Initiation v2.1 standard
and Account Information v2.1 standard before deadlines in
May and November 2024.
These four banks have now
implemented v2.3 of the Payment Initiation standard, and are
due to implement v2.3 of the Account Information standard by
30 November this year.
Kiwibank is also included in
the plan, and has an implementation timeline to be live with
the Payment Initiation and Account Information v2.3
standards in May and November 2026.
About
Payments NZ
Payments NZ is the governance
organisation at the centre of Aotearoa New Zealand’s
payments system. Established in 2010 with the endorsement of
the Reserve Bank of New Zealand – Te Pūtea Matua, we
manage and govern the country’s core payments clearing and
settlement systems to ensure they remain safe, efficient,
interoperable, and fit for the future.
We work in
close partnership with industry to set the rules and
standards that enable seamless payments between financial
institutions, support API-enabled innovation through our API
Centre, and lead strategic efforts to modernise and
strengthen the payments ecosystem. In 2024, our systems
processed over $8 trillion in retail and high-value
payments. Our focus is on delivering world-class payments
that support New Zealanders – today and for generations to
come.
