Payments NZ's Jamie Wood says the discussion about payments system access should include what role an organisation wants to play, and what responsibilities come with that

By Jamie Wood*

We often talk about “the payments system” as if it were one thing. It isn’t. A more open and diverse system can create greater competition, innovation and choice, but only if we are clear about the different roles within it and the responsibilities that come with each. 

Most of us give little thought to what happens after we tap a card, pay a bill or transfer money, and that is exactly how it should be. 

We expect the payment will go through, the money will arrive, and our financial data will remain secure. The payments system runs on that trust, which is made possible by many organisations working together behind the scenes. 

The ecosystem is changing, and the distinctions between those jobs matter. 

One example is the Reserve Bank of New Zealand – Te Pūtea Matua's announcement that Nelson Building Society has become the first non-bank deposit taker to operate in the Exchange Settlement Account System (ESAS). ESAS is the wholesale settlement layer where approved financial institutions settle what they owe each other using central bank money. 

That distinction matters. The money people and businesses use every day is largely private money held in bank accounts. Customer money does not travel through ESAS on its way from one account to another. Banks debit and credit their customers' accounts, while ESAS separately settles the resulting obligations between financial institutions. 

New technology, regulation and infrastructure are making the ecosystem more diverse and interconnected. That is positive. But ESAS and real-time retail payments are not interchangeable. They serve different purposes and operate with different types of money.

A system of connected responsibilities 

No single organisation runs our country's payments system. 

The Reserve Bank owns and operates ESAS, the wholesale settlement layer. Payments NZ governs core clearing systems and provides the common rules, standards and legal frameworks that allow participating organisations to exchange retail payments consistently and securely. 

Regulators, financial institutions and technology providers each bring different responsibilities and perspectives. 

Our role is to help those different parts of the ecosystem work together by translating shared objectives into practical rules, standards and coordinated delivery. That becomes increasingly important as the number and range of organisations involved increases. 

Access to ESAS and participation in retail clearing systems are connected, but they are not the same. Most fintechs do not need an ESAS account to offer everyday payment services. If an organisation wants to settle directly in central bank money, it is taking on a wholesale settlement role. Fintechs can innovate and compete in payments without becoming direct participants in the wholesale settlement system.

Eligible organisations already have a pathway to apply for ESAS access. Joining a Payments NZ clearing system is a separate step, with common rules, standards and safeguards for exchanging payments directly with other participants. 

For Payments NZ, the “so what” is simple: greater participation can support competition and innovation, but access must be matched by the capability, responsibilities and safeguards required for the role an organisation wants to play. 

That alignment is what turns individual changes into system-wide progress. 

We see this pattern around the world. Innovation tends to scale most effectively when organisations can build on common standards, shared foundations and a clear framework for interoperability. 

For Aotearoa New Zealand, the lesson is that coordination becomes more important as the ecosystem expands, bringing diverse organisations together around common standards and a shared direction.

Openness depends on shared foundations 

A more open payments system can create opportunities for a wider range of organisations to connect, compete and develop new services. However, openness should not mean fragmentation. 

Customers do not experience industry rules, standards or governance arrangements directly. They experience whether a payment is safe, reliable and arrives when expected. As more organisations participate in the ecosystem, maintaining that experience depends on interoperability, common standards and clearly understood responsibilities. 

These shared foundations allow innovation to scale across the ecosystem while protecting the trust and resilience on which payments depend. 

Coordinating a diverse ecosystem 

A more open and diverse payments ecosystem is something to welcome. Enabling broad access to payment systems has been part of Payments NZ's purpose from the outset because greater participation can support greater competition, innovation and choice for New Zealanders. 

The discussion should not simply be about who gets access. It should be about what role an organisation wants to play in the payments system, and what responsibilities come with that role. 

New organisations and services should strengthen the ecosystem, not fragment it. The test is whether the system continues to work seamlessly for the people and businesses that rely on it every day. 

The goal is not diversity for its own sake. It is creating the conditions where innovation can scale while maintaining the trust, resilience and consistency that people and businesses rely on every day. 

Wider participation creates opportunity. But access and safeguards must advance together. That is how we modernise the payments system while keeping it safe, reliable and trusted.

*Jamie Wood is General Manager Clearing Systems at Payments NZ. Systems managed by Payments NZ, whose shareholders are ANZ, ASB, BNZ, Citibank, HSBC, Kiwibank, TSB Bank and Westpac, transact more than $8 trillion a year.