Open banking boosted in New Zealand as major banks upgrade API

The four largest banks in New Zealand - ANZ, ASB, BNZ, and Westpac NZ - have implemented version 2.3 of the Payment Initiation API standard, enabling payments service providers and fintech companies to offer customers new, more flexible payment options.

This latest standard, developed by Payments NZ's API Centre, marks the third milestone in the industry's minimum open banking implementation plan. The most notable enhancement is the introduction of mandatory support for enduring payment consent, a key industry demand.

Enduring payment consent enables customers to authorise automatic, repeat payments from their accounts via third-party services.

Customers set payment limits through their online banking app or portal. If a payment request exceeds this limit, customers receive a notification prompting them to review and approve the transaction before it proceeds.

The API Centre is currently finalising implementation with the four banks. Kiwibank is scheduled to adopt the standard ahead of a separate milestone in May 2026.

Phil Cass, API Centre Manager at Payments NZ, stated, "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."

He added, "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."

The milestone coincides with the Ministry of Business, Innovation and Employment (MBIE) preparing regulations under the Customer and Product Data Act, which was enacted earlier in the 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," said Cass. "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 open banking standards milestone will be recognised at an upcoming API Centre event in Auckland in June, reflecting on six years of industry progress and outlining future plans under the developing CPD framework. At the same event, the API Centre will introduce Ngā Tohu Ārahi, its Data Handling Guidelines. These guidelines have been developed in partnership with Māori data experts and are grounded in Māori Data Governance principles.

"This is about more than a standard – it's about the evolution of an ecosystem," said 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."

Open banking allows customers to share financial data such as account balances and transaction histories with third-party providers. It also permits direct payments from customers' bank accounts through these trusted providers, using standardised Application Programming Interfaces (APIs). These APIs function as secure digital connectors between banks and third parties, allowing for real-time exchange of information.

The API standards are designed to ensure data security, transparent sharing, and robust customer consent protocols, putting control in the hands of consumers regarding access to their information.

The Payment Initiation API standard allows consumers to create and execute electronic payments by connecting securely through third-party services to their bank, without sharing login credentials. The four largest New Zealand banks previously implemented version 2.1 of the standard, advancing the nation's readiness for wider open banking adoption.

Version 2.3 introduces key upgrades, including mandatory support for enduring payment consent as well as decoupled authentication. The latter enables customers to begin a transaction on one device and complete authorisation securely on another, such as their mobile banking app, thereby improving convenience and user experience.

Currently, five fintech companies - BlinkPay, Qippay, Volley, Wych, and Worldline - have contracts with one or more banks based on either version 2.1 or 2.3 of the Payment Initiation API. In addition, 22 further third parties are registered with the API Centre and will be able to approach the four implementing banks to discuss partnerships using the new standard.

The API Centre, established by Payments NZ, works with a broad range of stakeholders to co-design open banking frameworks and ensure secure, efficient data sharing.

It is governed by an API Council, which includes representatives from across the industry and operates as a self-governing body setting API standards for the sector.

The open banking implementation plan, first published in 2023 and updated in 2024, sets deadlines for the largest banks to be operationally and technically prepared to partner using the API Centre's standards. The plan requires ANZ, ASB, BNZ, and Westpac NZ to implement both the Payment Initiation and Account Information version 2.3 standards by 30 November 2024. Kiwibank has a timeline to achieve compliance with these standards in 2026.

Payments NZ is responsible for governing the core payments clearing and settlement systems in New Zealand. In 2024, the systems it manages processed over NZD $8 trillion in retail and high-value payments.