The Ministry of Business, Innovation and Employment (MBIE) has released a discussion document seeking feedback on proposed changes to New Zealand's regulatory framework for the payments sector.
The discussion document considers a number of options for updating the regulation of payments services (e.g., money transfer services, payment gateways and digital wallets) including potentially onerous new licensing requirements. The consultation, which is open for submissions until 3 July 2026, presents an important opportunity to influence the direction of the reforms.
Summary of the proposals
What has caused the consultation?
The discussion document notes that New Zealand has no single, dedicated set of rules for payment service providers. Instead, the relevant regulatory obligations arise across a range of legislative frameworks. Depending on the nature of the service, that might include:
- obligations to register on the Financial Service Providers Register (FSPR) and to become a member of an approved dispute resolution scheme under the Financial Service Providers (Registration and Dispute Resolution) Act 2008;
- compliance with the “fair dealing” provisions of the Financial Markets Conduct Act 2013 (FMCA) - e.g., ensuring that marketing of financial services and products is not misleading or deceptive;
- ensuring that interchange fees charged on certain credit and debit card transactions comply with limits imposed under the Retail Payment System Act 2022; and
- various compliance requirements under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (for example, customer due diligence obligations).
This position contrasts with several overseas jurisdictions where dedicated payment services legislation has been adopted or proposed - such as Singapore, the UK and Australia. For example, the UK’s Payment Services Regulations 2017 establish a comprehensive regulatory framework requiring certain payment service providers to obtain authorisation and comply with conduct of business requirements such as rules on safeguarding of customer funds, transparency, and major incident reporting.
The paper also includes a notable focus on digital tokens and questions whether current laws are sufficient for token-based models, such as Bitcoin or stablecoins. It refers to the Financial Markets Authority’s recent review of tokenisation in financial markets, which concluded that regulatory fragmentation is currently constraining adoption and recommended a purpose-built regulatory regime.
What might a future framework look like for New Zealand?
MBIE has outlined various objectives for an updated regulatory approach, including ensuring any new rules are clear and easy to apply, and avoiding unnecessary barriers to cross-border activity. Positively, the paper also recognises the need for any new framework to align with various ongoing related reforms. This includes the recently introduced open banking framework under the Customer and Product Data Act 2025, the expansion of ESAS access criteria to eligible non-bank entities, and the Reserve Bank's ongoing payments modernisation programme.
The discussion document does not outline specific proposals in any detail at this stage but notes various possibilities, including:
- Making existing rules clearer through guidance, standard templates or targeted legislative amendments.
- Industry standards or co-regulatory models, with Government backstop powers.
- Introducing baseline rules for all payment service activities (for example, safeguarding, disclosure, reliability and accountability), scaled to risk and size.
- Introducing licensing and oversight for some payment service activities, potentially with tiered thresholds.
The paper does not identify any specific recommendation at this stage. However, it notes a particular interest in alignment with Australia (where ongoing reforms are creating a licensing-based framework with safeguarding requirements and prudential rules for certain larger stored-value providers). This hints at a preference for adopting a licensing framework in New Zealand.
If so, that would likely represent a significant change in regulatory requirements for affected providers. For context, if this was implemented as a category of market services licence under the FMCA, the provider would need to satisfy the FMA that it met prescribed eligibility criteria and that its directors and senior managers are “fit and proper persons” to hold their respective positions. In addition, once licensed, providers would face ongoing obligations, such as reporting any material changes in circumstances to the FMA. A licensing regime is therefore likely to be more onerous than the current requirements applicable to most payment providers and would involve more active regulatory supervision.
Next steps and key takeaways for New Zealand businesses
MBIE is seeking submissions by 3 July 2026. MBIE will use the feedback from the consultation process to advise Ministers on whether there is a case for change, what outcomes to prioritise, and what types of options could work best. If Ministers decide further work is needed, MBIE expects it would proceed in stages, potentially including further consultation on detailed proposals.
While the discussion document is open-ended, it strongly suggests that New Zealand is likely to move towards some form of updated payment services regulation. The possibility that this could include a licensing regime - with all that entails for compliance costs and regulatory oversight - makes this consultation particularly important.
Businesses that provide, integrate or rely on payment services should use the short window before submissions close to engage directly with MBIE and help shape the design, scope and proportionality of any future framework.
Bell Gully's payments team regularly advises on the full range of matters relevant to payments, including FSPR registration, Retail Payment System Act 2022 compliance, open banking, and related consumer protection obligations. If you require any advice on the consultation or assistance with a submission, please get in touch with the contacts listed or your usual Bell Gully adviser.
Disclaimer: This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.
