What is open banking and what does it mean for you?

New Zealanders will soon have better access to open banking, but what is it? And what does it mean for how you shop and do business?

Open banking is a secure shared infrastructure for moving financial information

Open banking is the future of banking. It’s a financial technology that uses an open API (Application Programme Interface) to send information safely. It creates a shared digital infrastructure to transport information securely between registered parties.

The open API lets you send a business or institution a chunk of financial information, which should make it faster and easier to complete transactions.

The Government has established a consumer rights framework to support open banking and all the major banks are now on board. Open banking is already in place in the UK and Australia and growth has been impressive in both countries.

Open banking in action

We already have one open banking product available, which you may have used: Online EFTPOS. This is a secure online EFTPOS transaction that goes through your banking app, available with all the big four banks. It’s popular with merchants because it prevents charge-backs and has very low transaction costs compared with credit card payments.

A safe, user-friendly and affordable payment option, this demonstrates the type of products that can become available with the open banking infrastructure.

What will it mean for shoppers and businesses?

The possibilities for open banking are huge. Open banking should allow other types of low-cost transactions, which should cut costs for your business and give consumers more payment options. For example, a complete online wallet is in development which could eliminate the need to carry loyalty cards, ID and proof of address. This should make it easier to apply for a loan, buy alcohol and make use of new financial products. Open banking is also a first step on the journey to a central digital currency, which could be kept in your digital wallet.

It’s likely to spark the development of more apps and services for businesses, which may give you options for managing your finances and getting added value and security from your online accounting tools – for instance, paying directly between you and your suppliers to prevent invoice fraud.

What are the opportunities in your industry?

Open banking is a massive sandbox of possibilities for fintech – we’re not experts, but we’d be happy to chat about the potential opportunities for your business.

< Older Post

Newer Post >

Becoming an employer of choice

15 October 2025

How to attract great people to your business and how to keep them. Three tips to help you rise to the challenge to become an employer of choice.

What the IRD Expects from You as an Employer

10 October 2025

As an employer, there are several obligations and expectations set by the Inland Revenue Department (IRD) that you must adhere to. Understanding these requirements is essential for maintaining compliance and avoiding any potential penalties. Let's take a closer look at what the IRD expects from you as an employer. Register as an Employer Before you hire your first employee, you are required to register as an employer with the IRD. This is a crucial first step in ensuring that you can meet all tax and payroll obligations. Accurate Record Keeping The IRD requires you to keep accurate and detailed records of all employment-related transactions. This includes: Employee personal details Wages and salary paid Payroll dates and methods PAYE deductions and remittances Details of benefits or allowances provided to employees Maintaining proper records helps ensure that you are reporting and remitting the correct amounts to the IRD. Deduct PAYE Tax You are responsible for deducting PAYE (Pay As You Earn) tax from your employees' pay. This involves calculating the correct amount of PAYE and ensuring it is deducted from each employee's salary or wages before their net pay is provided. Pay Employer Contributions In addition to PAYE, you may also be responsible for contributing to your employees' social security and retirement benefits, depending on the country you operate in. These contributions are typically paid in conjunction with PAYE tax. Issue Statements and Forms At the end of the tax year or upon employment termination, you should provide each employee with a statement showing their total earnings and PAYE deductions. Additionally, filing the appropriate end-of-year PAYE schedules with the IRD is required. File Employer Returns Employers are required to file regular returns with the IRD, which could be monthly, quarterly, or annually, depending on specific regulations. These returns should accurately report all payroll activities, including PAYE deductions. Handle Tax Codes and Changes It's crucial to apply the correct tax codes for each employee's circumstances. Any changes in employment status or tax code must be updated promptly to ensure accurate tax withholdings. Comply with Audit Requests The IRD may audit your business to ensure compliance with employer obligations. As such, being prepared to provide all requested information and records in a timely manner is vital. Adhering to these expectations from the IRD is not just about compliance; it's about fostering a transparent and trustworthy relationship with your employees and the tax authorities. If you need assistance with understanding or managing your obligations as an employer, consider reaching out to a professional accountant. Our team is here to help you navigate these responsibilities seamlessly, ensuring peace of mind and allowing you to focus on growing your business. Feel free to contact us for further information or assistance.

Starting a sole trader business

7 October 2025

Thinking of starting your own sole trader business? The Sole Trader Toolkit from the Ministry of Business, Innovation and Employment has all the basic advice you might need.