New Zealand’s payments system governance organisation Payments NZ has launched an industry application programming interface (API) pilot, potentially opening the door to easier digital payments for Kiwis.

The pilot will be conducted by six development partners - ASB, BNZ, Datacom, Paymark, Trade Me and Westpac - which will build and test two payment-related API standards designed to simplify partnering and system interfaces.

“Technology is evolving at a rapid pace and we want to ensure industry has core system capabilities in place to innovate quickly and bring to market new and improved service offerings,” said Steve Wiggins, chief executive of Payments NZ.

“However, we also need to ensure the safety and security of the payments system and the information being shared, so taking a balanced approach is also important,” he continued, adding: “As such, this pilot will test the viability of these APIs, and assess their suitability for our market.”

The APIs being tested are account information and payment initiation, both of which have been adapted and modified for local market conditions from the UK’s open banking API standards.

Alongside the pilot - which is expected to complete in late 2018 - an industry working group is also designing a framework within which the APIs could operate.

Meanwhile, in Australia, the consultation period for the Review into Open Banking concluded last week, with the Australian Banking Association publishing its response. While the ABA stated Open Banking can be a positive for consumers, it highlighted some areas that need a greater level of detail and discussion.

“Our number one area of concern is around customers understanding what they are consenting to and what their data will be used for”, commented chief executive Anna Bligh.

ABA members also believe that a 12-month time frame is too short to properly implement such an important reform. “Along with a number of other industry bodies the ABA are calling for a more appropriate timeframe to properly implement this reform,” she added.

Among the report’s 50 recommendations, were a “layered regulatory approach” involving different regulators, the establishment of a new Data Standards Body, that banks make information on products and services - such as price, fees and other charges - publicly available where obligations to do so existed, and that data sharing required “explicit, fully informed” consent of the customer.

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