Payments NZ to be authorised for Open Banking framework developments

New Zealand-based Payments NZ has submitted a request to the Commerce Commission for authorisation to work with API providers and third parties.

 

This authorisation would help Payments NZ to further develop arrangements, facilitating a more secure and well-utilised Open Banking framework. 

Payments NZ’s Open Banking framework

According to the official announcement, Payments NZ is seeking authorisation to jointly develop its Open Banking with banks and fintechs. It also subsequently applies to a new partnering framework relating to the provision of API services by API providers to third parties. The authorisation would be for an initial five-year period.

The proposed partnering framework implies the joint development of:

• An accreditation scheme, including accreditation criteria, for third parties. 

• Default standard terms and conditions on which API providers would contract with third parties who meet the accreditation criteria.

Payments NZ mentioned that the company does not seek authorisation for the specific accreditation criteria or the default terms and conditions themselves, but rather for their joint development and application. Moreover, a public version of Payments NZ’s authorisation application is already available on the Commission’s case register.

The Commission may grant authorisation under section 58 of the Commerce Act 1986 (the Act) for agreements that may otherwise breach the Act if it is satisfied that the agreement will in all the circumstances result, or be likely to result, in such a benefit to the public that the conduct should be permitted.

More about Payments NZ

Payments NZ is a governance organisation at the heart of Aotearoa New Zealand's payments system. It manages and regulates payment system policies and standards, encouraging interoperable, safe, open, and efficient payment systems. Its API Centre was developed as a business unit which develops, publishes, and manages API Standards, while also managing the use of API Standards by Registered API Providers and Third Parties. For clarification, API Standards are the standards and protocols underpinning the development of Standardised (or Common) APIs and are designed to enable Third Parties to connect to API Providers. 

In November 2023, Payments NZ which manages NZ's payments system, was bidding for its API Centre to be at the centre of not just Open Banking but of data sharing in other industries such as energy and telecommunications. In a white paper, the organisation stated that the Customer and Product Data Bill, which was introduced into parliament by the outgoing government, had some shortcomings. The bill was projected to establish that consumers have a right to access their data and to direct who else has access to their data with the banking industry.