RBNZ Calls for Payments Modernization Amid Global Economic Risks
The Reserve Bank of New Zealand (RBNZ) is pushing for payments to be considered core economic infrastructure, alongside roading, water, and electricity. This move aims to modernize the country's retail payment system, which has been criticized for being outdated.
RBNZ Assistant Governor Karen Silk states that having resilience in and sovereignty over critical infrastructure such as payments can be 'really important'. She notes that New Zealand is the only OECD country without a modern payment system, with EFTPOS remaining the primary domestic payment platform. This makes it difficult to connect with other faster payment systems used globally.
The RBNZ estimates that modernizing the payment system could deliver economic benefits of $0.7 billion to $1.3 billion, or 0.16% to 0.30% of GDP. The bank also warns of the risks associated with becoming 'captive' to services provided from overseas, particularly in a world with increasing geopolitical risk.
The RBNZ is seeking submissions on its payments issues paper by October 27, which aims to spark a national conversation about the need for a modern payment system. The bank acknowledges that this requires collaboration between government, industry, and stakeholders to create a clear regulatory framework and facilitate innovation in the sector.