Open banking could save Kiwi businesses millions. But what could that look like for yours?
19 Oct 2026
The Commerce Commission has previously estimated that New Zealand businesses spend around $1 billion a year accepting Visa and Mastercard payments.
Now its latest retail payments snapshot highlights another opportunity: businesses could collectively save $180 million annually by using lower-cost pay-by-bank alternatives, reducing acceptance costs for eligible debit card transactions by approximately 53%.
To put this snapshot into perspective, we're looking at a recent high-volume collection incident in the news: A water utility's early billing run involving 44,000 payments totalling $6.14 million.
The Mathematics of Paying by Bank
While we don't know the utility's exact payment mix, which would include direct debits and card payments; applying the Commerce Commission's findings to a hypothetical $6 million recurring billing run illustrates the potential impact.
Assuming conservatively, 25% of the $6.14m debited was paid for by debit or credit card transactions:
Metric | Traditional Debit / Credit Card Processing | Pay by Bank (Open Banking) |
Eligible Debit Volume (25% of $6M) | $1,500,000 | $1,500,000 |
Illustrative Processing Rate | ~1.0% | ~0.47% (53% reduction) |
Estimated Fee Cost per Billing Run | $15,000 | $7,050 |
Potential Savings per Billing Run | — | $7,950 |
Open banking saves businesses more than money
While a potential 53% reduction in debit card acceptance costs captures headlines, there are also opportunities to improve efficiency behind the scenes.
Moving recurring collections directly to bank accounts can help businesses reduce some common operational challenges:
Easier Recurring Payment Setup: Customers can authorise recurring payments digitally through their bank, reducing the need to manually enter account details or complete traditional direct debit authorities.
Fewer Card Expiry Issues: Bank account details aren't affected by card expiry dates, potentially reducing payment interruptions.
Fast Settlement: Pay by bank can offer faster access to funds - normally, well within 2 hours of payment.
Simpler Reconciliation: Integrated payment information can help reduce manual matching and exceptions.
Lower Administration Costs: More efficient payment collection and retry processes can reduce the time spent managing failed payments.
Open banking doesn't just save businesses money on fees. It's also an opportunity to make the whole process of getting paid simpler and more efficient.
To find out more about how open banking can save you time and money, contact noora.ruskola@qippay.com.