Assistant Governor Karen Silk says payment systems are core economic infrastructure and enable everyday transactions across the economy. Around $2 trillion of retail payments flow between New Zealand banks annually. Given the scale of payments systems, even small improvements in their efficiency can lift national productivity, enhance the global competitiveness of local businesses, and strengthen our economic resilience. Conversely, an outdated system can constrain economic growth.
"New Zealand's retail payments system is operationally reliable, but is outdated, and does not meet international best practice for modern, faster retail payment systems. We have fallen behind global standards, with outdated infrastructure, limited modern payment capabilities, and insufficient innovation," Ms Silk says.
The Minister of Finance has endorsed the Reserve Bank to lead the delivery of a strategy for payments modernisation in New Zealand, in coordination with key agencies and industry participants. This reflects the close alignment between payment system outcomes and RBNZ's monetary and financial stability mandates, settlement operations, and our wider central bank policy interests.
We have set up 2 workstreams to progress payments modernisation:
- The first workstream will examine the technical requirements needed to modernise payments infrastructure and will inform the development of future options.
- A separate workstream focuses on reforming strategic leadership, regulatory coordination and system governance, across the retail payments system.
Key strategic questions include whether to continue pursuing incremental reform or to undertake structural modernisation of the underlying payments infrastructure to build long-term capability and strengthen resilience.
A close working relationship with industry will be fundamental to the success of this initiative, Ms Silk says.
"We cannot do this alone and, in partnership with other government agencies, are committed to working closely with businesses, the payments industry and other interested stakeholders to shape the future direction for New Zealand's payments system and meet broader public interest objectives."
The Issues Paper consultation will be open for 10 weeks. Feedback is welcomed from all those with an interest in the future of the payments system until 27 October 2026.
"Following the Issues Paper consultation, we will analyse submissions and provide Ministers with advice on options for future work and reform. We expect this to be completed in the first half of next year," Ms Silk says.
A proposed roadmap and business case will be developed in addition to the options paper. Proposed roles and responsibilities, and payments modernisation policy options will be subject to a subsequent public consultation as part of the policy development process, including cost benefit analysis.
More information
- Modernising New Zealand's retail payment system (PDF, 779 KB)
- Have your say on the future of payments
