Open banking use is surging in New Zealand, even though around 70% of people surveyed by BNZ were unfamiliar with the term, including 41% who had never heard of it.

BNZ processed almost 90,000 open banking payments in August, up 12% on July, and nearly 14 times its monthly average in 2024.

Open banking lets people connect their bank account to an app or service they choose and decide what it can access. Apps and services connected to BNZ this way requested account information more than 5.9 million times in August, for things like budgeting, accounting, account checks and loan applications.

"People don't go looking for open banking. They want to pay for something, keep on top of their budget or apply for a loan with less paperwork, and open banking makes that easier," says BNZ Head of Payment Development Jonathon Dale.

"Most of the time it's working quietly in the background. People don't need to know what it's called. They need it to work, and they need to be able to trust it,” says Dale.

For many people, choice in how they pay matters. Payments NZ research released last week found four in ten respondents had changed how they pay to avoid fees or surcharges. Surcharges had also become the leading reason respondents gave for avoiding contactless payments.

Payap is one example of how open banking is providing another way to pay. The app lets customers make contactless payments directly from their bank account using their phone, in store or online. Customers approve the payment in their banking app instead of using a card, and there’s no surcharge.

With no monthly fees and lower per transaction costs Payap is also a lower-cost option for businesses.

“Businesses pay a fee every time they take a payment, and that adds up. Open banking gives them a cheaper way to get paid. When margins are tight, that makes a real difference,” says Dale.

"Cards aren't going anywhere, and they'll keep serving people well. But open banking adds another choice, and more choice means more competition on cost and convenience."

For customers, trust matters just as much as convenience, he says.

"Connecting an app to your bank account or approving a payment means trusting it with your money and information. People need to be confident that's safe, which is why regulation is so important."

Every provider must be accredited by the Ministry of Business, Innovation and Employment (MBIE) before it can access customer information or start a payment and can only do what the customer has approved.

"You're in control. You decide what to share, and you can disconnect a service whenever you want," says Dale.

"As more useful services arrive, we expect open banking to become an increasing part of our financial lives," he says.