Latest news with #SteveWiggins
RNZ News
08-07-2025
- Business
- RNZ News
New website aims to make switching banks easier
Sick of your bank but overwhelmed by how switching might work? A new website launched in June hopes to change the perception that changing banks is too hard. In its market study into personal banking released last year, the Commerce Commission found half of New Zealanders had never switched banks, and thought switching had little benefit. The Commission says customer inertia means there is a lack of competitive pressure on the big four banks, which enjoy 85 to 90 per cent of the market. It is echoed by the smaller banks which complained to the Commission last year that the inertia made it hard for them to attract customers. The Commission also criticised a switching service run by the banks own governance organisation Payments NZ since 2010 - saying it wasn't working and that no assessment on its effectiveness was done. In response to that Payments NZ has revamped the service into a new website, ' Ready to Switch '. The website explains how it works, including transferring things like automatic payments and direct debits to a new bank. Steve Wiggins is chief executive of Payments NZ, and speaks to Kathryn about the new website. Commerce Commission chair John Small, also speaks about what benefits increased levels of switching could bring. Photo: RNZ
Scoop
04-07-2025
- Business
- Scoop
Payments NZ Launches Website To Demystify Switching
Payments NZ has launched a website to help banking customers better understand the switching process in Aotearoa New Zealand, as part of industry work to improve awareness and transparency around the service. The Ready to Switch site went live in mid-June, and provides information about what switching is, how it works, and what customers can expect from their current and new bank when they switch. It also includes links to bank websites for customers who want to start the process. The switching process has been in place since 2010, and is delivered by participating retail banks, with Payments NZ setting rules and standards. In 2024 the Commerce Commission recommended improvements to switching as part of its market study into personal banking services. Payments NZ convened an industry working group in response to the Commission's recommendations, with the website as an initial result. The industry working group has also established improved reporting, now shared with the Commission monthly, and is investigating other improvements to switching. Steve Wiggins, Chief Executive of Payments NZ, says the new website will be a useful starting point for greater awareness of switching. 'The best point of contact for customers who want to switch is with the bank they want to switch to. However, we recognise there's a place for consistent information from the industry that's independent of any one bank,' says Wiggins. 'The switching process isn't new, but we acknowledge that more New Zealanders need to know what it does and how to access it. 'We hope the new site will provide a resource the industry can build on to collectively raise awareness of switching, by letting banking customers know there's a process in place that makes it easy.' Although Payments NZ's work around switching coincides with the rollout of industry-led open banking, led through its API Centre, Wiggins says the processes are separate and independent from each other. 'An effective switching process and secure open banking are both part of delivering greater competition and choice for New Zealanders. They're independent workstreams, but one common element is they're both in place now and the job from here is to build on them,' says Wiggins. 'As consumers get more familiar with the switching process and open banking offerings, we're confident that they'll be better informed and more empowered to make choices that work for them.' The switching website is live at Question and answers about switching What is switching? The switching process makes it easy to move payment instructions, saved payees and account balances to a new bank. It means banking customers don't have to re-establish their direct debits and automatic payments, or set up saved payees again, when moving from one bank to another. If they choose to close their account at their current bank, it also lets them easily move their account balance over to their new bank. What does the switching process cover? The switching process covers: Payment instructions, including direct debits and automatic payments Saved payees Account balances, if the customer chooses to close their account with their current bank. What's not covered? Switching doesn't include: Any payments coming into the customer's bank account, such as salary payments or direct credits. Customers need to contact anyone making payments to them and provide their new bank account details. Recurring card payments (including credit cards). Home loans, credit cards, overdrafts or any other lending products. How long does it take? Once the customer's new bank submits a switching request, their current bank will share the information authorised with the new bank within five business days. From that point on, the new bank works to meet arrangements agreed with the customer, including meeting their chosen switch date. Who actually delivers switching? The switching process is delivered by participating banks in Aotearoa New Zealand, working directly with each other. Payments NZ sets rules and standards to govern the process. What rules and standards are in place for switching? Payments NZ's standards for switching include: A five-business-day service level agreement (SLA) for the current bank to provide information to the new bank Standardised forms and processes across banks Switching support teams at participating banks. Are banks meeting the switching standards? In April and May 2025, 99 percent of switches met the five-business-day SLA for the customer's current bank to send information to the new bank. 96 percent of switches actually met this standard in three business days or less. In all cases where switching took longer than five days, this was due to a customer-chosen future switch date. How many switches are happening? Payments NZ has received early reporting on the number of customers using the industry's formal account switching process. At this stage, the data has been shared with our BECS management committee and is not being released publicly. It's important to note that this data only reflects use of the formal switching process. Many customers choose to move their banking relationships without using the switching process, so the numbers we have don't represent the full extent of switching activity across the sector. Why aren't incoming payments covered? Some switching processes overseas, including in the United Kingdom, include a redirection function for incoming payments. However, in today's environment where customers are at a greater risk of fraud and scams, as well as being able to benefit from further innovation within payments, a redirection service can be counterproductive: Fraud risk: Redirecting payments from closed accounts can create vulnerabilities, hindering efforts across the industry to identify and close mule accounts, an essential fraud control. Innovation barrier: Redirecting payments can impact interoperability, create a barrier to entry for new banks, and break authorisation flows in open banking contexts. Customer delay: Redirection only defers the customer's responsibility to update payment sources, increasing the length of the switching process and requiring additional customer action once redirection ends. For these reasons, the Aotearoa payments industry is focussed on evolving the switching service alongside payments innovation. What else is Payments NZ doing in response to the Commerce Commission's recommendations? Apart from the launch of the new switching website, we've worked with our industry working group to develop new internal reporting processes that track switching volumes and service timeframes across the industry. As part of this work, banks now report monthly switching data to Payments NZ, including adherence to the five-business-day Service Level Agreement (SLA) for information transfer between banks. This data is shared with the Commerce Commission monthly. The industry working group has also reviewed aspects of the switching process that could be improved. This includes addressing operational friction points and clarifying roles and responsibilities to improve customer experience.
