Payment Initiation

New Zealand's open banking payments (the first regulated stage under the Consumer Data Right from December 2025) allow customers to securely authorise a third party to initiate direct bank-to-bank payments (one-off or recurring) from their account. This uses standardised APIs developed by Payments NZ API Centre, providing benefits like lower fees than cards, real-time confirmation, balance checks to avoid overdrafts, and easy reconciliation.

The flow typically involves redirect authentication (OAuth-like): The customer authenticates directly with their bank (no credential sharing with third parties).

Key Roles and Flow

Bank (API Provider/Data Holder): A designated bank that exposes secure Payment Initiation APIs. It authenticates the customer, checks consents, verifies balances, and executes the payment via the interbank system.

Third Party (Service Provider): A fintech or app (e.g., an e-commerce merchant, payroll provider, or subscription service) that offers the payment option to customers. It integrates the API to request payment initiation but often avoids direct accreditation/complexity by using an intermediary.

IT Intermediary/Broker (Accredited Intermediary): An infrastructure provider that handles accreditation, API connections to multiple banks, consent management, and unified interfaces. This allows non-accredited third parties to offer services without individual bank partnerships.