Ian Woolford, the Reserve Bank’s Director of Money and Cash, has key advice on how regulatory and industry bodies can work together to bring New Zealand’s payments system into the twenty-first century: speak softly and carry a big stick.
Woolford appeared alongside Commerce Commission Chairman John Small and Business NZ’s Director of Advocacy Catherine Beard on a panel at the Payments NZ annual conference on Tuesday.
The trio were asked how government regulators and the payments industry could work together on a path of least resistance to create a better payments system.
Woolford said the Government and industry needed to be a “little bit realistic” about the layers of regulation involved in the process.
Parties needed to be “coordinated across regulators” and get as much clarity from them as possible in order to not get bounced from one regulator to another.
“Sometimes it helps to, you know, speak softly and carry big sticks,” he told the room.
Woolford also said NZ was “far behind” when it comes to progression in the payments space and the opportunity to “leapfrog” was staring the country in the face.
In July 2023, the Reserve Bank and Council of Financial Regulators criticized New Zealand’s banking and payments industry for not providing real-time payments fast enough.
“Real-time payment capability is a prominent example of so-far missed developments that has put New Zealand payments behind on the global stage,” Reserve Bank Assistant Governor Karen Silk said at the time.
NZ banks only moved to 365-day a year payments, incorporating weekends and public holidays, in May 2023.
Prior to that, banks would only make transfers on working days, making NZ an outlier among OECD countries in not having real-time payments.
At the Payments NZ conference Woolford described NZ as world-leading and like the All Blacks in the EFTPOS space 45 years ago. Now, the country’s payments systems was more like a runner up in an “inter-club regional rugby contest”.
“We are so far behind,” he said.
In his conference speech Small told attendees payments were “almost literally the life blood” of the NZ economy.
“They are by far the most used financial service that there is, crucial to the way we live our lives, crucial to the thriving of business,” he said.
“From an economic point of view and from a competition point of view, what's really important to us is that these new options are all given a fair shot at success.”
Small was vague about what the Commerce Commission’s vision for payments would actually look like, saying it wanted reliable and efficient payments that better met the “evolving needs of all New Zealanders”.
1 Comments
We are so far behind, its hilarious. Go to China and payments are seemless using QR codes and stored value accounts, linked to bank accounts, so incorporating old and new. And you can use them anywhere, to catch a bus, to hail and take an Uber, even use the app for translations and ordering food. Hell, rent a bike, within a minute, you are riding down the road without a bespoke app.
And they are "third world", what the hell are we?
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.