Parallel Finance: how Aotearoa can move money better

New Zealand’s payments system has served us well for a long time. For most people, most of the time, payments simply work. We tap, transfer, settle, refund, reconcile and move on. That everyday reliability matters. It's part of the trust infrastructure that sits quietly underneath commerce, financial services and public confidence.

But the architecture behind payments is changing.

Globally, we are moving away from a world where money moves through a relatively small number of familiar channels, towards one where multiple payment rails operate alongside each other. By payment rails, we mean the systems, rules and connections that allow money to move from one party to another.

Some are familiar: bank transfers, card schemes, direct debits, EFTPOS, merchant acquiring and correspondent banking. Others are newer, or are being modernised: open banking, real-time account-to-account payments, digital wallets, stablecoins, tokenised settlement models and, potentially in time, central bank digital cash.

This is sometimes described as “parallel finance”: not one new system replacing the old, but a more complex environment where different ways of moving value sit side by side.

For New Zealand, this is not a distant trend. It's already relevant to the work underway on payments modernisation, open banking, Confirmation of Payee, scam prevention, digital cash, financial innovation and competition.

From our work across payments, fraud prevention and customer outcomes, one lesson stands out: the most important questions are not only technical, they are practical and human. Who is the payment for? What risk sits around it? What does the customer understand? What happens when something goes wrong? And, how do we preserve trust as money starts to move faster, through more channels, with more data attached?

The opportunity for Aotearoa is to approach this shift deliberately and positively: not as a race to adopt every new rail and not as a defensive exercise to protect what is familiar, but as a chance to design a payments future that is faster, safer, more resilient and more useful for New Zealanders.

The future of payments is not one rail

It’s tempting to talk about payments innovation as though one technology will eventually win. Real-time payments will replace batch systems. Open banking will replace cards. Stablecoins will replace correspondent banking. Digital cash will replace physical cash. In practice, it's likely to be messier, more interesting than that.

Different payment use-cases have different requirements. A domestic retail payment, a merchant settlement, a payroll file, a cross-border remittance, a government disbursement, an insurance claim, a marketplace payout and a corporate treasury movement are not the same problem. They involve different expectations around speed, cost, certainty, reversibility, privacy, fraud risk, settlement finality and customer support.

That is why the next era of payments is unlikely to be defined by a single dominant rail. It will be defined by the ability to choose the right rail for the right purpose.

The future will not reward organisations simply for having access to more rails. It will reward those that can choose between them wisely, with the customer clearly in view.

Diagram 1: Parallel Finance: multiple payment rails require robust governance to realise value for Aotearoa

Why this matters for New Zealand now

Aotearoa has a particular opportunity here. We are not the largest market, and we do not need to behave as though we are. Our advantage is different. We are small enough to collaborate, practical enough to test what works, and sophisticated enough to build a payments environment that reflects both international best practice and local values.

There is already important work underway.

Payments NZ’s Payments Direction programme is helping shape the future of payments in Aotearoa, including work on payments modernisation, next-generation payments, digital identity and a broader system roadmap.

The Reserve Bank of New Zealand (RBNZ) is increasingly engaged in the future of money and payments, including modernisation of account-to-account capability, access to Real-Time payment and the long-term role of central bank money. This is important system work, and it gives New Zealand a stronger foundation for the next stage of change.

Open banking has also moved from policy discussion to regulated reality. The Customer and Product Data Act 2025 now provides the legislative basis for regulated customer-authorised data sharing and designated actions, including payment initiation. The first major banks were required to have open banking systems live from December 2025, with further phasing through 2026.

That matters because open banking creates some of the connective tissue for parallel finance: customer-controlled consent, standardised access to banking data, accredited participants and new payment-initiation rails - including Enduring Payment Consent, which can support repeat or variable account to account payments without customers having to re-authorise every transaction.

The digital-value conversation is also becoming more concrete.

In March 2026, the Financial Markets Authority (FMA) issued a designation in relation to ECDD Holdings Ltd's NZDD (New Zealand Digital Dollar) stablecoin, declaring that particular non-yielding stablecoin not to be a financial product under the Financial Markets Conduct Act. The FMA has also signalled a broader approach to supporting responsible innovation through its FinTech sandbox expansion and its work on tokenisation in financial markets.

The point is not that every stablecoin or tokenised product will be suitable, or low risk. The point is that New Zealand is beginning to develop a more nuanced regulatory conversation about digital value.

Digital cash is another important part of the wider picture, but it needs to be described carefully. The Reserve Bank is still exploring whether digital cash is right for New Zealand. It is in a multi-year design, engagement, policy and cost-benefit phase, with a decision still to be made with Government and any launch no earlier than 2030.

Public feedback has also been clear that cash, privacy and control matter deeply to New Zealanders. That is not a barrier to innovation. It is a reminder that trust has to be designed into any future form of money from the beginning.

Scam prevention is gathering momentum too. The New Zealand Anti-Scam Alliance is bringing together banks, telecommunications providers, digital platforms, consumer groups and government agencies. Its 2026 work programme includes data sharing, disruption, education, voluntary codes and work to expand Confirmation of Payee.

That matters because faster and more varied payment flows will only be sustainable if fraud and scam prevention evolve with them. These are not separate conversations. They are connected pieces of the same transition.

Open banking enables new forms of customer-authorised payment initiation. Real-time payments raise expectations around speed and availability. Digital wallets and embedded finance change where customers experience payments. Stablecoins and tokenised settlement models challenge assumptions about the cross-border movement of value. Digital cash raises important questions about public money, inclusion, privacy and resilience. Scam prevention becomes more urgent as money moves faster.

Some of this shift is already visible in familiar customer-facing experiences such as Online EFTPOS, digital wallets, QR-enabled payments and BNPL, although these should not all be treated as the same kind of rail. Some are account-to-account payment methods, some are interfaces, and some are credit overlays.

Taken together, these developments point to a future where payments strategy is no longer just a technology or operations issue. For businesses, it is becoming a board-level question.

What this means for businesses: from payment rails to payment routing

In a parallel-finance environment, and without a single dominant rail, organisations will need to choose the best rail for different payment flows.

Payment rails will no longer remain only the language of banks and payment specialists. They will become increasingly relevant to businesses, government agencies, platforms, insurers, retailers, exporters, payroll providers and anyone else moving money at scale.

Payment decisions are becoming strategic, customer-impacting choices - not back-office processing decisions.

Diagram 2: Parallel Finance: organisations will need to be able to make an informed choice about the right payment rails to use

Choosing the most appropriate rail for a particular payment is payment routing.

That does not simply mean choosing the cheapest or fastest option. The cheapest rail may not provide the best customer outcome. The fastest rail may not provide enough time to detect a scam. The most innovative rail may not yet have the operational maturity required for a particular customer group. The most familiar rail may not be fit for a new digital business model.

Payment routing will need to consider a wider set of questions. How quickly does this payment need to settle? When is settlement final? Can the payment be reversed if something goes wrong? What information travels with the payment? What customer disclosures are needed? What data is being shared? What AML, sanctions, fraud and privacy obligations apply? What happens if the rail or provider is unavailable? Does the customer understand what they are using? Who helps them if there is a problem?

For example, a New Zealand insurer might choose one payment route for a routine premium collection, another for an urgent claims payout after a weather event and another again for a refund where the customer needs clear confirmation and support.

The question is not simply which rail is newest. It is which rail best fits the customer need, the risk, the timing and the level of certainty required. This is where parallel finance becomes more than a technology trend. It becomes a governance discipline.

The organisations that do this well will not simply have more payment options. They will have better decision-making around those options. They will understand when to use a traditional bank rail, when to use a real-time account-to-account option, when an open banking payment makes sense, when a card still offers the right protections, and where emerging digital-value instruments might have a role in the future.

The winners will not necessarily be those who move first. They will be those who can move with confidence, clarity and purpose.

Trust must be designed in

The most important design challenge for New Zealand is trust.

Kiwis tend to value payments that are simple, reliable and safe. We do not usually think about the infrastructure until something goes wrong. A payment is delayed. A scam occurs. A refund is unclear. A transaction is disputed. A business cannot reconcile settlement. A customer does not understand whether they paid by card, bank transfer, wallet balance or some other mechanism.

As payment options multiply, this kind of confusion can grow. That is why trust cannot be left to the user interface alone. It needs to be designed into the architecture, the rules, the operating model and the customer journey.

If trust is not designed into every rail and interaction, adoption will stall - even if the technology works.

For consumers, this means clear language, transparent fees, confirmation of who they are paying, visibility of who they have paid, warnings that actually help, and support pathways when something goes wrong.

For businesses, it means certainty of settlement, reliable reconciliation, manageable compliance obligations and confidence that new payment methods will not create hidden operational risk.

For regulators and policymakers, it means ensuring that innovation supports fair, efficient and transparent markets, while protecting people from foreseeable harm.

For banks, fintechs and payment providers, it means building systems that are not only fast and innovative, but explainable, resilient and accountable.

For New Zealand, that is the real opportunity of parallel finance: not just more ways to move money, but better ways to design trust into money movement.

The scam challenge cannot sit to one side

Any future-looking payments conversation in New Zealand must be honest about scams.

Faster payments are beneficial. They can improve cash flow, reduce friction, support innovation and create better customer experiences.

But speed can also move harm faster if the right protections are not in place. This does not mean slowing innovation down. It means building fraud and scam prevention into the design from the beginning.

Confirmation of Payee is a good example. On the surface, it's a practical control: helping people see whether the account name and number align before they send money. But it also reflects a wider principle. Better payments infrastructure should help people make better decisions at the point of risk, not only try to recover losses after the event.

The same is true of the Anti-Scam Alliance. Its value is not only in individual initiatives, but in the recognition that scam prevention requires cross-sector coordination. Scammers do not organise themselves around industry boundaries. They move across banks, telcos, digital platforms, messaging services, social media, crypto channels and international networks. Our response needs to be more connected too.

Confirmation of Payee, behavioural analytics, mule-account detection, shared intelligence, customer education, liability settings, platform cooperation and telecommunications protections all become more important in a world of faster and more varied payment flows.

Parallel finance makes that collaboration even more important. As value moves through more channels, the system needs a shared view of risk, responsibility and response.

A practical agenda for organisations in Aotearoa

So what should New Zealand organisations be doing now?

1. Map the rails they already use. Many organisations have a more complex payments environment than they realise. Cards, bank transfers, direct debits, merchant acquiring, international transfers, wallets, payment gateways, payroll systems, refunds, settlement files and third-party providers may all sit in different parts of the business.

   
   

2. Understand customer and business use-cases. Not every payment needs to be instant. Not every payment needs the same level of reversibility. Not every customer group has the same digital access or confidence. Good payments strategy starts with the job the payment is doing.

   
   

3. Assess risk and resilience. Payment innovation should be tested against operational resilience, financial crime, scams, conduct, privacy, liquidity, outsourcing and third-party dependency. These should not be reasons to avoid innovation; they should be part of how innovation is made durable.

   
   

4. Design the customer experience. Customers should not need to understand the full complexity of payments infrastructure. But they do need to know what matters: how much it costs, how long it will take, who they are paying, who they have paid, what data is being shared, whether they can reverse it, and who will help if something goes wrong.

   
   

5. Governance. Organisations need clear ownership of payment-routing decisions. These decisions should not sit only in technology, only in product, only in compliance or only in operations. They cut across all of them.

An opportunity to lead in our own way

New Zealand does not need to copy the payments strategies of larger markets. We can learn from them, but our pathway should reflect our own context.

We have a concentrated banking market, a growing fintech sector, strong public institutions, an active payments-governance community, and a pragmatic regulatory culture. We also have communities that must not be left behind: older New Zealanders, rural communities, small businesses, migrants, disabled people, people with limited digital access and people who may be more exposed to financial harm or exclusion.

A good payments future for Aotearoa should be modern and inclusive. It should support competition without eroding trust. It should enable speed without sacrificing safety. It should welcome innovation without over-promising that every new rail is automatically suitable for every use case. That is the constructive balance we should aim for.

Parallel finance gives us a useful way to think about the future. It reminds us that payments modernisation is not only about infrastructure. It's about choice, interoperability, governance and confidence. It's about making sure that as new rails emerge, they add value for people, businesses and the wider economy.

The opportunity for Aotearoa is not simply to move money faster. It's to move money better, with more confidence, inclusion and value for everyone who relies on the system.

If we get this right, the next generation of payments infrastructure can do more than improve efficiency. It can support innovation, resilience, inclusion and trust. It can help businesses operate with more confidence. It can give consumers better experiences and stronger protections. It can create space for fintechs and established institutions to contribute in complementary ways.

The future of payments will not be one rail. It will be many. The real test will be whether we have the judgement, governance and imagination to use them well.

For me, that is the real opportunity for Aotearoa: to build a payments system where innovation is measured not only by speed or technical sophistication, but by the confidence it gives people and businesses to participate safely, fully and optimistically in the economy.

If you'd like to understand how we've supported our clients to navigate payment modernisation, or, how it applies to your organisation, contact emilie@mccallumco.net.