The Commerce Commission says it's concerned banks are charging high prices for their open banking application programming interfaces (APIs) which third-parties can sign up to use to access data with customers' permission, to create services and apps.
In its recent open banking report, the regulator identified the banks' pricing for API access, and the methods as to how this is done as being of concern and suboptimal.
"We are concerned that current pricing is damaging the nascent market. Taken together, prices are high, vary considerably between banks and are not transparent - this is limiting third parties' abilities to offer competitive products and services using these APIs," the Commission wrote.
The banks have outlined the API charges to the Commission, for payment initiation and account information calls:
| API Provider | Payment Initiation API Call Fee | Account Information API Call Fee |
|---|---|---|
| ANZ | 0.25% of the payment amount up to a maximum charge of $1 to businesses for goods and services. Examples: - $20 payment: 5c charge - $40 payment: 10c charge - $5,000 payment: $1.00 charge Onboarding and minimum monthly fees currently waived |
Charges will be for cost recovery only. ANZ is working with third parties to understand their use cases and cost incurred to support them. |
| ASB | Currently under review. Current rate range: $0.00 – $0.20 |
Currently under review. Current rate range: $0.00 – $0.20 |
| BNZ | Monthly flat fee: $30 (GST exempt) 600 free successful payment API requests per month $0.05 (GST exempt) overage charge per successful API payment request over 600 |
Monthly flat fee: $30 (+ GST) 3,000 free successful account information download requests per month $0.01 (+ GST) overage charge per successful account information download request over 3,000 |
| Westpac | Currently up to 30 cents per successful API call Pricing based on bilateral agreements Pricing may evolve as ecosystem matures |
Currently under consideration Pricing negotiated based on factors including: - Volumes - Customer demand - Use cases - Proposition |
Pricing as of 10 December 2024, source: the Commerce Commission
For a $10 transaction, BNZ's 5 cent API call fee is twice that of what ANZ charges; however, on a $400 transaction, ANZ's $1 fee is 20 times that of BNZ's 5 cent charge.
The Commission expects to see the banks review and lower the pricing, and standardise it as well, so as to drive open banking uptake.
Furthermore, the Commission also wants to see "a coordinated orderly transition of suboptimal access services to bank APIs where available." It said one bank wants to switch off all suboptimal access despite not all use cases being catered for.
While the four big banks in the country had a standardised open banking payment API in market by May 30 this year, only BNZ was open for partnering, and live with multiple third parties prior to that deadline. It took until October 2024 that the first third-party, BlinkPay, was using all four banks' APIs, the Commission noted.
The Commission wants to see banks start contracting with third parties ahead of additional open banking milestone deadlines, giving them greater confidence to plan.
Andrew Bayly, Minister of Commerce and Consumer Affairs, is considering a Commerce Commission recommendation to designate the fees banks' charge for API access, which could open them up for regulation.
9 Comments
I must say i wasn't really expecting any fees.
Currently i log into my internet banking, download my transactions, log into budgetting tool, upload transactions. I thought the whole idea of open banking was that i give the budgetting tool permission to read my transactions and skip the whole manual download step. The bank isn't providing anything extra.
$30/month to access my own account information?
Honestly, neither was I.
This cements my thinking that Open Banking is an oxymoron--a red herring diverting our attention from sounder examples of competition. It's really Permissioned Banking.
A more accurate definition of 'Open Banking' is being able to import my Ethereum address into any frontend or application I desire.
Given the banks insist on defining competition as between each other, I think the government needs to step up and establish clearer, pragmatic crypto regulations that focus on its use as a payment substrate, so players like Coinbase can step in and eat their lunch.
Some ridiculous prices in there, for essentially the same service the banks provide internally.
When I setup a payment via the ANZ internet banking, I don't pay anything extra for that payment. One would assume its using the same API calls as any other app.
API calls are baked into the banking systems, its how they operate. They shouldn't be charging anything for fair use of them.
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