Wallo Pay launches open banking push to cut NZ fees

Wallo Pay, a Wellington fintech startup, has launched an open banking payments service designed to cut card acceptance costs for New Zealand merchants and reduce point-of-sale card surcharges.

It is pitching the service as an alternative to card payments, charging a flat 0.6% merchant service fee. Wallo Pay argues that contactless card payments often attract surcharges of up to 3%, which it says is a high cost for small businesses and consumers.

The startup frames the issue as an economy-wide drain, estimating that more than NZ$1 billion is lost each year to surcharges and card-related fees. It is entering a market where payment costs and surcharging have become a political and consumer flashpoint.

Open banking rails

Wallo Pay's model is built on open banking. The platform routes payments as bank-to-bank transfers rather than through credit and debit card networks, reducing the number of intermediaries and changing the cost base for acceptance.

It also claims instant settlement, rather than batch processing or delayed clearing. Wallo Pay says this lets consumers avoid "pending" transactions and gives businesses immediate confirmation that funds have arrived.

The product targets a range of users, including hospitality merchants such as cafés and online sellers that want fast payment confirmation. It also points to peer-to-peer payments, where both parties want certainty that a transfer has completed.

Surcharges debate

Payment surcharging has come under scrutiny in New Zealand as consumers react to added fees on contactless transactions. Wallo Pay is positioning its launch as a market-led response while politicians and officials debate whether rules or limits are needed.

The pitch centres on transparency. Wallo Pay says a simple percentage fee gives merchants predictability and reduces the need to add a surcharge at the till. It argues that the model compares favourably with traditional providers that may charge higher rates for card acceptance.

Founder story

Wallo Pay was founded by Mithun Pookat, who traces the idea back to the early months of the pandemic.

Pookat missed a flight back to New Zealand from India by three hours as borders were closing in March 2020, leaving him out of the country for two years. During that period, he said he also faced redundancy from a previous role. He used the time to design what became Wallo Pay, sketching 120 pages of app wireframes by hand in a notebook.

Team and governance

While describing itself as a lean operation, Wallo Pay says it has built its technical base in Christchurch. It has also set up an advisory board that includes a former PayPal senior director, focusing on areas such as risk and compliance.

The company says it aims to win share in the domestic payments market, targeting 1% of New Zealand's NZD $115 billion payment volume, based on figures it cites. That would put it in competition with established payment providers and global networks that dominate in-store and online transactions.

Open banking-based payments are attracting growing interest in several markets as governments and regulators push for more competition in financial services. Adoption often depends on customer trust, user experience, and how seamlessly a payment method fits into existing checkouts and point-of-sale systems.

Funding route

Wallo Pay has launched an equity crowdfunding campaign on PledgeMe, inviting New Zealanders to invest.

Explaining his motivation, Pookat describes the business as a response to what he sees as embedded friction in everyday payments. He calls the platform a tool for financial empowerment that removes the "middleman tax" he believes has become an accepted part of New Zealand's commercial landscape.

Wallo Pay's near-term progress will be measured by merchant adoption at checkout and how often consumers choose bank-to-bank payments over cards for everyday spending. The company described itself as an entity refusing to wait for permission to innovate.