The deadline for the country's four major banks ANZ, ASB, BNZ and Westpac to be ready for open banking is 30 May. Photo: RNZ / 123rf
We all know the feeling of making an online purchase and having to get up to grab your credit card from across the room.
By the end of next week, New Zealanders will be able to make a secure one-off payment directly from their bank account to another through a third party, with 'open banking'.
Open banking set to change how people pay
Open banking allows customers to securely allow a third party to connect to their banking information.
For online shopping, forget about entering card details - instead, customers can make their bank information available to a third-party service provider.
Adrian Smith is the chief product officer at Blink Pay, a third party that facilitates the payment between the person and the shop from which they are buying.
When people are ready to make a payment, they are redirected to their banking website or app. After logging in and checking the payment details, customers select their account and then approve the payment.
"So ultimately it's centred around you the customer and it's all centred around your consent, nothing happens without your permission and so nothing happens without you saying it's okay to do that thing," Smith said.
Open banking can also be used for budgeting tools and investment advice, meaning customers' banking information can be accessed through a third-party provider.
For customers asking whether that was safe, Smith said it went through "quite a lot of rigourous standards".
"That's the point of standardisation and also a rigourous consent process for consumers.
"The third parties that are using this as well have to go through quite a rigourous security process, so all three of those factors combined should enhance New Zealander's faith in open banking," Smith said.
Payment NZ's Open Banking showcase at the Cordis Hotel in Auckland. Photo: Supplied
BNZ head of payment Jonathan Dale said people could have confidence in the system.
It may seriously change the way people make purchases, he said.
"I think the key thing for consumers is no matter what it is, it's how do you share your information to make things faster for you and more convenient, be it a home loan application, be it knowing what I'd like to do or enhancing my budgeting services there's an endless sort of range of options for it."
While some banks already offer open banking services, 30 May is the deadline for the country's four major banks ANZ, ASB, BNZ and Westpac to be ready for open banking.
Commerce and Consumer Affairs Minister Andrew Bayly said there were benefits to open banking, but New Zealand had lagged behind other countries in rolling it out.
"One of the advantages of being slow though, is that we've looked at what's going on around the world... but in some cases they haven't done it well.
"So, what we were introducing is what we've learned from those situations."
The government had worked to make sure people's information was watertight, Bayly said.
"If you say you want to give someone so much access to their data, they'd have to validate all the rules around it and there are very high penalties around it, so it's a much more secure system."