The pilot is headed by Payments NZ, the country’s payments governance organisation, and involves Westpac, BNZ, and ASB banks and Datacom, Paymark, and Trade Me, which are fintechs. The partnership will develop and test two payment APIs, “account information” and “payment initiation”, and is expected to conclude near the end of 2018.
APIs used in the pilot will give users the opportunity to use open banking apps to access payments and their bank account information in a secure manner, the latter of which is of paramount importance to building trust in the concept and system. On a similar note, Steve Wiggins, chief executive at Payments NZ, says, “We need to stimulate innovation . . . in a way that is safe. It needs to be as secure as the current system.”
Wiggins also adds that the goal of the pilot is to build towards a shared structure for APIs and come to a consensus on what a set of common APIs should look like, moves that “will help contribute to the aspiration of a progressive payments ecosystem”.
Payments NZ, during the pilot, is also in close communication with New Zealand’s Ministry of Business Innovation and Employment.
Moreover, as New Zealand is testing the waters for open banking, Australia is watching, with the government having already put forward a blueprint for implementing open banking in the country and made recommendations to the Financial Rights Legal Centre and Consumer Action Legal Centre. In light of the recent Cambridge Analytica and Facebook controversy, the two groups support consumers’ right to back out of the construct at any time they wish, arguing in a joint statement that “if consumers are to have confidence in the open banking regime, this distils down to the need to having control over their own data and to know that if they withdraw consent at any time that data will be deleted.”
By Elliot Lyons, Research Analyst