Banking - payments & access to my data

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ANglEAUT

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#271972 3-Jun-2020 23:04

What will it take for NZ banks & other financial institutions to open their payments systems & give us access to our data? Specifically, I am referring to something similar to PSD2 (see below) in use in the EU.

Some international banks are providing API's to allow immediate transfers of funds across institutions, for budget & investment apps to give you a view of your financial assets
As per the "Internet banking security" thread, it feels like the 2FA technology & passwords seem antiquated & insufficient at times
If POLi is such a "bad thing", why not enable us to be more secure & faster / efficient by using APIs? Just so that they can deny liability because I want a more efficient & cheaper mode of paying?
I have to download CSV / OFX files to import into my budget app instead of it being seamless, automatic & near real time
Transfers between banks still take overnight & international transfer take 5 "business days". It's digital bits! Even with balances & checks & verifications the recipient could have the funds in less than an hour.
Payday & personal loan companies that charge 15%-25% interest only give quarterly or bi-annual statements! The consumer needs to be more aware of their financial position.

Wikipedia: The Revised Payment Services Directive (PSD2, Directive (EU) 2015/2366, which replaced the Payment Services Directive (PSD), Directive 2007/64/EC) is an EU Directive, administered by the European Commission (Directorate General Internal Market) to regulate payment services and payment service providers throughout the European Union (EU) and European Economic Area (EEA). The PSD directive's purpose was to increase pan-European competition and participation in the payments industry also from non-banks, and to provide for a level playing field by harmonizing consumer protection and the rights and obligations for payment providers and users. The key objectives of the PSD2 directive are creating a more integrated European payments market, making payments safer and more secure and protecting consumers.

This is a new discussion related to "Internet banking security" and specifically the comments quoted here:

@chevrolux:

So why can't POLi just get vetted and certified for use with the banks? And until that point, the banks block it.

Because you are dead right, paying a surcharge just for the "privilege" of using a credit card is bollocks.

Either that, or the banks/card companies pull their heads our of their asses in term of their transaction fees.

@michaelmurfy: Since they're using man in the middle to login to customers internet banking this won't be possible either. Also nearly impossible to block since they go via a well known cloud computing company that customers also use and attempt to emulate an actual customer.

But also, this is way off topic now. Back on topic folks!

🙄 GZ doesn't seem to have a financial forum, so I'm posting this here in "Off topic". 🤔 Another sign that we don't talk about money as openly as we should.

Please keep this GZ community vibrant by contributing in a constructive & respectful manner.

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#2497814 3-Jun-2020 23:17

It is coming. Sorry, I can't say too much myself (others on here can share) but basically what you're referring to is "Open Banking":

- https://www.consumer.org.nz/articles/what-is-open-banking
- https://www.canstar.co.nz/online-banking/open-banking-new-era-looms-mean/
- https://www.interest.co.nz/personal-finance/98425/payments-nz-releases-standards-detailing-how-banks-and-fintechs-engage-open

solaybro

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#2497833 4-Jun-2020 01:10

Payments NZ are working on a bunch of stuff that will improve banking. You can read about it here.

mudguard

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#2497842 4-Jun-2020 07:01

I'd say most of the delays still are for fraud/AML reasons.

Stu1

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#2497854 4-Jun-2020 07:57

I don’t really see the point of open banking , there are multiple intraday payment files in a day right up to 1030Pm . The only improvement I would like to see in 7 day processing so intraday payments run in the weekend as well. The open banking source will make it harder for customers to negotiate with other banks for lending as the bank you are wanting to switch to could see the poor rate you may be on and offer less of an incentive to switch. It will make lending harder as consumers won’t be able to hide all their other expenses in other bank accounts e.g nespresso orders and multiple streaming services which are now all counted in the customers affordablity scoring.Payments by mistake or fund reversals will be a nightmare the process is bad enough now between banks let alone putting a third party in the middle. The AML requirements also difficult for non NZ banks as not only do they have to meet NZ AML/CFT legalization they often have to meet their sister banks global or local standards.

Handsomedan

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#2497930 4-Jun-2020 09:00

Stu1:

I don’t really see the point of open banking , there are multiple intraday payment files in a day right up to 1030Pm . The only improvement I would like to see in 7 day processing so intraday payments run in the weekend as well. The open banking source will make it harder for customers to negotiate with other banks for lending as the bank you are wanting to switch to could see the poor rate you may be on and offer less of an incentive to switch. It will make lending harder as consumers won’t be able to hide all their other expenses in other bank accounts e.g nespresso orders and multiple streaming services which are now all counted in the customers affordablity scoring.Payments by mistake or fund reversals will be a nightmare the process is bad enough now between banks let alone putting a third party in the middle. The AML requirements also difficult for non NZ banks as not only do they have to meet NZ AML/CFT legalization they often have to meet their sister banks global or local standards.

With that said, you still have to explicitly give permission under the Open Banking proposals to allow the other bank to see all of your data...

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Handsome Dan is also still somewhat perplexed...

antonknee

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#2497988 4-Jun-2020 10:01

Handsomedan:

Stu1:

I don’t really see the point of open banking , there are multiple intraday payment files in a day right up to 1030Pm . The only improvement I would like to see in 7 day processing so intraday payments run in the weekend as well. The open banking source will make it harder for customers to negotiate with other banks for lending as the bank you are wanting to switch to could see the poor rate you may be on and offer less of an incentive to switch. It will make lending harder as consumers won’t be able to hide all their other expenses in other bank accounts e.g nespresso orders and multiple streaming services which are now all counted in the customers affordablity scoring.Payments by mistake or fund reversals will be a nightmare the process is bad enough now between banks let alone putting a third party in the middle. The AML requirements also difficult for non NZ banks as not only do they have to meet NZ AML/CFT legalization they often have to meet their sister banks global or local standards.

With that said, you still have to explicitly give permission under the Open Banking proposals to allow the other bank to see all of your data...

Which presumably they will make a condition of getting a mortgage....

Open banking seems like a great idea to me - the benefits probably outweigh the concerns IMO. Totally agree payments should be processed quickly 7 days a week. Almost there now with payments usually only taking 2 hours or so on a weekday, but then again I totally understand the need for the computers to have the weekend off.

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boosacnoodle

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#2498001 4-Jun-2020 10:24

mudguard:

I'd say most of the delays still are for fraud/AML reasons.

TIL that Europe doesn't have AML.

ronw

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#2498019 4-Jun-2020 11:06

While we are all having a complaint of banking practices, I really think Banks are raking in the profitys with Paywave. The recent Covid-19 showed that firms liked the ease of Paywave but mnay smaller firms cokplined it was going to cost too much to install Paywave. Have no idea of the costs but surely the costs should be similar to Eftpos which should be neglible.

Why do they charge more for Paywave? Becuase they can I guess

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Mahon

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#2498127 4-Jun-2020 12:53

ronw:

While we are all having a complaint of banking practices, I really think Banks are raking in the profitys with Paywave. The recent Covid-19 showed that firms liked the ease of Paywave but mnay smaller firms cokplined it was going to cost too much to install Paywave. Have no idea of the costs but surely the costs should be similar to Eftpos which should be neglible.

Why do they charge more for Paywave? Becuase they can I guess

The cost per transaction on paywave for small business is quite large, and this applies to both credit and debit transactions. Needs to be sorted.

antonknee

492 posts

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#2498146 4-Jun-2020 13:35

Mahon:

ronw:

While we are all having a complaint of banking practices, I really think Banks are raking in the profitys with Paywave. The recent Covid-19 showed that firms liked the ease of Paywave but mnay smaller firms cokplined it was going to cost too much to install Paywave. Have no idea of the costs but surely the costs should be similar to Eftpos which should be neglible.

Why do they charge more for Paywave? Becuase they can I guess

The cost per transaction on paywave for small business is quite large, and this applies to both credit and debit transactions. Needs to be sorted.

So my understanding of this (and it could be wrong) but that in most cases it was a simple fix of changing your pricing plan onto (or off of, can't remember) a blended/unbundled rate? Looking online it would appear contactless would add 0.4% to the fee.

Our fees are apparently much higher than the likes of AU - and I don't buy the story that this is to cover rewards, as you tend to get better rewards in AU.

I believe part of the objection from retailers comes about because of our essentially transaction fee free EFTPOS system, from memory.

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itxtme

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#2498184 4-Jun-2020 14:21

michaelmurfy:

It is coming. Sorry, I can't say too much myself (others on here can share) but basically what you're referring to is "Open Banking":

- https://www.consumer.org.nz/articles/what-is-open-banking
- https://www.canstar.co.nz/online-banking/open-banking-new-era-looms-mean/
- https://www.interest.co.nz/personal-finance/98425/payments-nz-releases-standards-detailing-how-banks-and-fintechs-engage-open

Is it really though? A colleague had a conversation with a bank in regards to DD access outside of the "normal" method a month or two back. During that conversation the colleague brought up open banking and the banker suggested that it was all for show and not something they were genuinely trying to do. Guessing banks dont want their lunches cut [until the last possible moment before being legislated to]

Kyanar

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#2498186 4-Jun-2020 14:27

ronw:

While we are all having a complaint of banking practices, I really think Banks are raking in the profitys with Paywave. The recent Covid-19 showed that firms liked the ease of Paywave but mnay smaller firms cokplined it was going to cost too much to install Paywave. Have no idea of the costs but surely the costs should be similar to Eftpos which should be neglible.

Why do they charge more for Paywave? Becuase they can I guess

Using Mastercard as an example...

They don't charge more for Paywave. Merchants have been spouting that crap for ages in an effort to misdirect and encourage you to use (free) Eftpos instead, but it's a straight up lie. The issue is that contactless transactions are all directed over the scheme debit or scheme credit rails in New Zealand, whereas a swiped Eftpos card is directed over the Paymark or ETSL network. An Eftpos transaction carries no interchange, but a scheme debit carries a fee of $0.004c or so for an under $15 debit contactless transaction, or 0.40% for any other contactless debit transaction - which is in fact at a significant discount from a standard debit card (swipe or insert) transaction. Credit contactless is 0.50%, which is a significant discount from any other credit transaction (lowest is 0.90%).

The primary issue is blended versus interchange plus. Most merchants choose to go on blended because it means when someone comes along with the Westpac Hotpoints World Mastercard (a "Super Premium" card) they don't pay ~2.25% (2.05% interchange plus ~0.2% markup), but instead pay 1.5%. Downside is when someone taps their BNZ debit card, they pay 1.5% instead of ~0.5%.

This could be solved if Paymark/ETSL actually created an EMV application for Eftpos and forced banks to offer it on contactless Eftpos cards, like eftpos Payments Australia does with contactless eftpos cards (not to be confused with Eftpos cards!) but they've explicitly disclaimed any interest in it, presumably because with no interchange on Eftpos, there's no revenue stream to innovate with, and being owned by the two major US terminal manufacturers, neither ETSL nor Paymark really care about innovating in payments.

ronw

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#2498292 4-Jun-2020 15:12

What I don't understand is that in the past when you paid by cheque the shop did not pay anything they banked cheque but I don't remember having to pay anything
Now cheques are replaced by a technical solution and you have to pay. Must be a better system out there

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antonknee

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#2498350 4-Jun-2020 15:51

Kyanar:

Using Mastercard as an example...

They don't charge more for Paywave.... The primary issue is blended versus interchange plus...

Interesting, great to have that 'confirmed'.

Can't imagine there are that many people out there with the super premium cards - surely not worth it paying so much on every transaction, just so you can possibly pay less on a few transactions?

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antonknee

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#2498352 4-Jun-2020 15:54

ronw: What I don't understand is that in the past when you paid by cheque the shop did not pay anything they banked cheque but I don't remember having to pay anything
Now cheques are replaced by a technical solution and you have to pay. Must be a better system out there

When I started in retail (10 years ago) we were definitely paying a fee for cheques to be banked, it was a flat fee which really hurt on smaller cheques but worked out ok on large value ones - except frequently the cheques were made of rubber. And a fee for cash handling. And a fee to have it picked up. And a fee on credit cards/EFTPOS, and plenty of other things. But these are all just costs of doing business, and a smart business person accounts for this.

Credit is the "better system out there" IMO. Better fraud protection for consumers, it won't bounce like a cheque/less risk than cash for merchants, more convenient for everyone. Plus you can get rewards and interest free days etc as a consumer.

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