Retail payment systems and open banking

We are working to ensure that retail payment systems operate in the interests of New Zealand consumers and businesses.

About retail payment systems and open banking

Retail payment systems – such as credit and debit cards and EFTPOS – are used to transfer funds from consumers to merchants in exchange for goods and services.

Since 2016, MBIE has been working with the payments and banking industry to:

  • ensure that New Zealand’s existing payment systems are operating in the interests of New Zealand consumers and businesses
  • facilitate new ways of making payments, and allow consumers to securely share their banking data with trusted third-parties, including through the Payments New Zealand-led API Centre(external link) (such initiatives are commonly referred to as ‘open banking’).

A representative from MBIE sits as an observer on the Payments NZ API Council.

2020 merchant service fees review

The Government has signalled its commitment to making regulations to reduce merchant service fees in New Zealand. In December 2020, MBIE released a discussion paper exploring issues and options for regulating merchant service fees.

Options include:

  • introducing hard caps, targeted for different classes of merchants
  • facilitating collective bargaining to support small businesses
  • codifying rules and practices around surcharging, bundling merchant service fees, rewards and loyalty schemes
  • requiring banks to disclose specified information about merchant service fees to improve transparency.

We are seeking views and information from all interested parties - submissions close 19 February 2021.

Have your Say on the merchant service fees review

2016 Issues paper on retail payment systems

In February 2016, the Government asked MBIE to examine whether New Zealand’s retail payment systems — as they operate at present and as they may develop in the future — are producing good economic outcomes.

In particular, we asked:

  • Are consumers and merchants benefiting from ongoing innovation in payment systems?
  • Are card payment systems being used efficiently?
  • Are consumers and merchants bearing a fair share of the costs?

We released an Issues paper addressing these questions in October 2016.

Retail payment systems in New Zealand — Issues Paper [PDF, 1.1 MB] 

Submissions received on the issues paper

The issues paper called for public submissions by 2 February 2017. We received 46 submissions representing views from card schemes, banks, merchants, consumer representatives, and other industry representatives. Redactions have been made to some submissions subject to the Official Information Act 1982. Submissions are in alphabetical order.

View the submissions on the Issues Paper

Consumer Data Right

The Ministry of Business, Innovation and Employment is advising the Government on the development of a consumer data right in New Zealand to give individuals and businesses greater choice and control over their data.

The Ministry’s work in developing a consumer data right has followed international developments where some jurisdictions have attempted to intervene by engaging in legislative reform to promote consumer data portability or strengthen existing privacy rights.

Consultation on the discussion document exploring options for establishing a consumer data right closed on 19 October 2020.

Read more about the development of a consumer data right in New Zealand

Further reading

In December 2019, the Minister of Commerce and Consumer Affairs, Hon Kris Faafoi, wrote to New Zealand banks (or ‘API Providers’).

Read the letter to banks [PDF, 281 KB]

In May 2019, the Minister of Commerce and Consumer Affairs, Hon Kris Faafoi, spoke at the launch of the Payments New Zealand API Centre.

Read the full speech

On 26 June 2018, the Minister of Commerce and Consumer Affairs, Hon Kris Faafoi, set out his vision for retail payments and open banking in New Zealand in a speech to the Payments New Zealand conference.

Read the full speech on the Beehive website(external link)

In April 2018 Payments New Zealand updated the Minister of Commerce and Consumer Affairs on the work the industry is undertaking in response to Hon Jacqui Dean’s letter of August 2017.

Letter from Payments New Zealand to Hon Kris Faafoi [PDF, 305 KB] 

Hon Kris Faafoi’s response to Payments New Zealand [PDF, 99 KB]

The then Minister of Commerce and Consumer Affairs, Hon Jacqui Dean, wrote to Payments New Zealand, the industry body for payments.

Hon Jacqui Dean’s update to Cabinet on retail payment systems [PDF, 146 KB] 

Hon Jacqui Dean’s letter to Payments New Zealand [PDF, 61 KB] 

Last updated: 05 August 2020