Bank payments to be processed daily

WELLINGTON: New Zealand’s payments system has just undergone a major revamp that will mean most electronic payments between banks will now be processed every day of the year.

To date, banks could only send and settle payments transacted on business days.

Now, most will be able to do so over weekends and public holidays.

‘‘In a highly connected, alwayson world, we know people will appreciate the option to be able to pay or get paid any day of the year,’’ Payments NZ chief executive Steve Wiggins said.

He noted the change would make buying and selling things online easier.

‘‘We could also see improved cashflow for smalltomedium businesses over weekends and public holidays.’’

Mr Wiggins explained the upgrade would affect more than $1.5 trillion of direct credit transactions, direct debits, automatic payments and bill payments made each year.

He suggested people planned for the change by ensuring they were ready for any automatic payments set up for weekends or public holidays to be processed on their actual due date.

He also suggested checking direct debits — regular bank payments set up and controlled by businesses like utility providers or gyms.

A caveat with the upgrade is that customers of some small banks may still be stuck with businessdayonly payments.

This is because some smaller banks are not directly plugged into the payments system.

They do not have settlements accounts with the Reserve Bank, so have agreements for their transactions to be settled via bigger banks’ connections.

While Mr Wiggins understood the likes of The Cooperative Bank had an arrangement regarding a bigger bank, the infrastructure of which it used to ensure payments were processed every day, he suggested customers of smaller banks doublechecked whether they would benefit from the change.

Banks directly plugged into the payments system include ANZ, ASB, Bank of China, BNZ, Citi, HSBC, ICBC, Kiwibank, TSB and Westpac.

The Reserve Bank is reviewing the criteria that gives banks the ability to get a settlement account with it.

Mr Wiggins also noted that ‘‘highvalue’’ transactions, which used a different settlement system to the one upgraded, would not benefit from the change. —