Payments NZ urges resilience in payments modernisation

Payments NZ has warned that resilience must be central to payments modernisation in New Zealand as digital payment systems grow more complex.

Chief executive Steve Wiggins said the sector's focus is shifting from whether payments infrastructure is changing to whether it is becoming stronger as that change unfolds. In his view, resilience should be treated as a core design issue, not something added after new systems are introduced.

His comments come as the industry faces mounting pressure from cyber threats, operational disruption, geopolitical tension and the growing use of artificial intelligence in financial services. Wiggins said those forces are converging and putting greater strain on shared infrastructure.

He argued that faster or more feature-rich systems should not be considered a success if they also increase fragility. The risk extends beyond individual institutions because the payments system relies on common networks, standards and interconnected providers.

System pressure

The warning reflects a broader global debate over how to modernise ageing payments infrastructure while reducing the risk of outages, fraud and systemic failure. In New Zealand, the issue has become more urgent as digital transactions account for a growing share of consumer and business activity.

Wiggins described resilience as broader than system uptime or recovery times after an incident. It also covers how systems respond when assumptions fail, dependencies come under stress, or disruption is intentional rather than accidental.

A key part of that shift is the growing importance of digital identity and trust. As more automated systems and software tools begin acting on behalf of customers, the sector must answer basic questions about authority, accountability and control, he said.

The issue is gaining prominence internationally as policymakers and industry groups examine how transactions can be verified when software, rather than an individual, triggers them. Wiggins pointed to emerging work on shared standards for authorising and approving those transactions.

He also referred to the Bank for International Settlements' Finternet model, which places digital identity at the foundation of a ledger-based financial framework. For New Zealand, he suggested, the implication is that trust and identity are becoming structural features of payments infrastructure rather than optional layers around it.

Shared governance

Wiggins said the implications extend beyond technology choices to governance, assurance and accountability across the sector. In his view, some elements of resilience must be designed collectively because risks now move across organisations, platforms and service providers.

That position highlights the role Payments NZ sees for itself in the market: not building products or choosing technologies, but bringing participants together around common standards, clear accountability and coordinated decision-making.

No single institution can manage the trade-offs created by modernisation on its own, he argued. The balance between efficiency and control, openness and assurance, and speed and trust now depends on how the wider ecosystem is organised.

He also stressed the need for diversity in system design. Resilient payments systems should not depend too heavily on a single rail, provider or mode of operation, because that concentration can magnify disruption when conditions deteriorate.

In that context, he framed diversity not as duplication or inefficiency, but as a source of strength. For a national payments system, that suggests policymakers and industry operators may need to think more carefully about concentration risk as innovation continues.

AI and trust

The rise of AI adds another layer to the discussion. As digital systems increasingly act on behalf of individuals, Wiggins said any gains in efficiency must be matched by clearer arrangements for responsibility and trust.

He cautioned that trust, once lost, is difficult to rebuild. The warning reflects a wider concern in financial services that customer confidence can be damaged quickly when automation outpaces governance or when accountability for system decisions is unclear.

Although payments modernisation will continue, Wiggins made clear that its long-term value depends on whether resilience is built into decisions from the outset. Common standards, governance and coordination are necessary, he argued, if the sector is to avoid replacing legacy weaknesses with new forms of fragility.

"The real challenge for payments now is not moving faster but moving deliberately - with a clear view of the system we are shaping and the trust it must sustain," Wiggins said.