Commission Explores Pathways For More Innovative Payment Options

The Commerce Commission is looking at ways to remove barriers to more innovative payment options that would allow Kiwis to make in-person payments directly between bank accounts, as a low-cost alternative to current card payment options.

Commission Chair, John Small, says this work is aimed at promoting competition and efficiency in the retail payment system for the long-term benefit of businesses and consumers.

“We’ve observed a lack of innovation in options to enable Kiwis to pay for goods and services via in-person bank transfers and have identified a way for the Commission to help enable better outcomes,” Dr Small says.

“Bank transfers are typically one of the lowest cost payment options and if it were safe and easy for Kiwis to pay this way in-person, merchants would benefit from faster, cheaper payments,” Dr Small says.

“New Zealand’s Eftpos network has delivered Kiwis an effective low-cost payment option for many years, however its use is declining due to consumer preferences and fewer Eftpos cards being issued by banks.

“Our preliminary view is that a designation of the bank transfer network and subsequent use of our regulatory powers would create a more level playing field for new entrants to launch innovative options to make in-person bank transfers in New Zealand,” Dr Small says.

“We have seen this work successfully overseas with the use of QR codes and mobile applications that facilitate new in-person payments and believe this approach is complementary to the Government’s development of a Consumer Data Right (CDR) regime.

“We can require banks to provide access to the necessary systems ahead of CDR legislation going live, so that the sector is ready to meet the expectations it sets to deliver benefits to all New Zealanders.”

Dr Small says Payments NZ is coordinating work with banks and providers of new payment options on the requirements to enable a safe and trusted environment for new entrants to create innovative options to enable in-person bank transfers.

“We support this work and we don’t want it to stall, so we are proposing to use our regulatory powers to complement Payments NZ’s work.”

The Commission is seeking views on its characterisation of the issues and opportunities in this space. The paper can be found here. Responses are due by 4pm on 25 September 2023 and can be sent to retailpaymentsystem@comcom.govt.nz.

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