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Developments in the global
payments landscape
2025 Environmental
Scan Report
1
Contents
This document is produced by Payments NZ Limited (Payments NZ)
and must not be copied, reproduced, or distributed, in whole or in part,
without the consent of Payments NZ.
Payments NZ has relied on publicly available information and information
provided to it by third parties in the production of this document. While
Payments NZ has made every eort to ensure that the information
contained in the document is accurate, it takes no responsibility for
any errors or omissions in relation to the information contained in this
document and Payments NZ will not be liable for any loss sustained
in reliance on the information in this document. If you wish to rely on
such information, you should obtain your own independent advice.
©September 2025 Payments NZ Limited. All rights reserved.
Foreword 2
An evolving global context 3
Key trends for 2025 4
Digital payments platforms underpinning economies 6
The rise of tokenisation 8
Emerging technologies & next generation payment methods 12
Digital identity for consumers and businesses 14
Navigating nancial services and payments regulation 16
From open banking to open ecosystems 18
32 2025 Environmental Scan Report
Foreword
Nau mai, haere mai—welcome to our 2025 Environmental
Scan Report.
This new, short format report highlights six interlinked themes
in payments development across the globe and how these
continue to inuence our payments ecosystem in Aotearoa
New Zealand:
• Digital payments platforms supporting economies
• The rise of tokenisation
• Emerging technologies and next generation
payment methods
• Digital identity for consumers and businesses
• Navigating nancial services and payments regulation
• From open banking to open ecosystems
Payments has always been a networked industry by nature,
but as the pace of digital change accelerates, we’re seeing
increasingly interlinked capabilities and systems, both within
countries and across borders.
Mirroring this trend, our scan themes are now also rmly
interconnected—meaning that payments industries across
the world need to think about new digital capabilities and
partnerships as part of a big-picture strategy.
The industry here in Aotearoa is rising to this challenge, as we
continue to accelerate our open banking eorts and as we
consider next generation payment capabilities as part of a
comprehensive strategic roadmap for the future.
At Payments NZ, we’ll use the broad material from this scan
to support our strategic ecosystem conversations throughout
the coming year. We’ll also be releasing further short-form
papers that focus on the key themes and topics, as our
research and industry discussions evolve.
We hope you nd this year’s scan interesting and valuable
for your strategic planning. You can register on our website
to receive regular updates on our work—or join us as a
participant or member, and add your voice to industry
conversations shaping the future of payments in Aotearoa in a
changing world.
Karawhuia!
An evolving global context
More than ever, customers are demanding fast, secure, and convenient
payment services—where, when, and how they want to pay and get paid.
1 World Economic Outlook Update, January 2025: Global Growth: Divergent and Uncertain
2 Consumer Payment Trends Shaping How We Pay in 2025 | Discover Global Network Insights
The global payments ecosystem is at an
inection point, driven by rapid technological
advancements, geopolitical instability, and
evolving customer preferences.
Since our 2022 scan, the global economy has weakened
under persistent inationary pressures, nation-state conicts,
and security challenges. Geopolitical tensions and trade
uncertainties are dampening business sentiment and driving
ination and scal austerity across both private and public
sector investments.
According to the International Monetary Fund (IMF), the
declining momentum in ination and growth will continue
well into 2026—with global growth projected at 3.3% in 2025
compared to a historical average of 3.7% and global ination
projected to slide from 4.2% in 2025 to 3.5% in 2026.1
At the same time, regulators are increasingly scrutinising the
payments industry’s relationship with both traditional (banks)
and non-traditional players (such as ntechs and neobanks),
aimed at mitigating potential risks in the nancial services
ecosystem.
Globally, customers continue to demand fast, secure, and
convenient payment services that meet them where, when,
and how they want to transact. According to S&P Global, up
to 59% of consumers have used a digital wallet in the past 90
days.2 Fintechs and other non-traditional payment service
providers are disrupting the market, challenging established
players, and innovating through creating digital, mobile, and
contactless payment solutions.
Revolut, a ntech that focuses on customer needs at all
levels, grew from150,000 customers to over 8 million in just
the three years from 2017. Digitalisation is transforming the
delivery of banking services, leading to the emergence of new
digital-only bank business models.As of the end of 2024,
about 60 banks in the European economy were identied as
being digital-only.
As these forces reshape payments globally, it raises a crucial
question: how do we prepare our ecosystem to thrive in a
rapidly evolving digital future?
54 2025 Environmental Scan Report
Emerging technologies & next
generation payment methods
The convergence of technology and payment systems
is reshaping how transactions occur. Technology-driven
disruption in commerce across payments and other
domains is giving rise to non-human inuences such
as agentic AI, Internet of Things (IoT), and embedded
nance. As technology advances rapidly, identifying and
seizing emerging opportunities will be crucial.
The rise of tokenisation
Decentralised technologies continue to challenge
traditional account-based products and services.
Central banks, nancial institutions, and technology
rms are in various stages of exploring and piloting
new payment paradigms. Interest in the tokenisation
of assets has increased signicantly, with pilots in full
swing around stablecoins and Central Bank Digital
Currencies (CBDCs).
Digital payments platforms
underpinning economies
Digital payment platforms are driving economic
activity by enabling faster, more secure transactions,
leading to increased consumer spending and more
business opportunities. They foster innovation and
growth, supporting the development of new products
and services, ultimately beneting customers through
greater choice and lower costs.
Digital identity for consumers
and businesses
Ineciencies, identity theft, scams, and privacy
breaches impose signicant costs to the economies.
The ability to quickly and securely verify parties—with
active customer consent—minimises risk and creates
opportunities for organisations and consumers to
engage fairly and equitably. In Aotearoa, the regulatory
and technical pre-conditions now exist to start
realising the potential of digital identity.
From open banking to open data
The shift from open banking toward broader open
ecosystems is fostering innovation and giving customers
greater control over their data. This transition allows
businesses and consumers to combine their data, creating
more interconnected choices and targeted opportunities.
Supporting open banking and other data-sharing initiatives,
the Customer and Product Data Act came into force in
March 2025, establishing a consumer data right framework
for Aotearoa.
Navigating nancial services
and payments regulation
Governments across the globe are striving to keep up with
the digital payments evolution while promoting innovation
and competition, increasing consumer protections and
ensuring a safe and resilient payments ecosystem.
There is growing demand for richer, more informative
data, particularly where payments integrate with related
transactions such as security, loyalty, receipting, and
reconciliation. From a technical perspective, standards like
ISO 20022 are enhancing data ow and capability.
Key trends for 2025
76 2025 Environmental Scan Report
reduce the friction that often leads to cart abandonment,
where customers nd payment steps unsafe, complicated, or
confusing—ultimately causing lost sales.
This technology is rapidly becoming the norm and is already
widely available in Aotearoa, with Trade Me, Xero, Uber, and
Air New Zealand among the early adopters. In other markets,
embedded nance oerings such as lending and insurance
add-ons are also proliferating, providing additional value to
customers.6
Meanwhile, ‘account-to-account’ (sometimes called pay-by-bank)
options are expanding, enabled by APIs and open banking.
These solutions, such as Australia’s PayTo network, work for
both online and in-person payments and are meeting the
rising demand for faster, more secure transactions. Account-
to-account allows customers to pay directly from their own
accounts, aligning with growing expectations for speed, safety,
and convenience. Signicant investments in technological
infrastructure, including AI, data hosting, internet infrastructure,
and cloud computing, are enabling digital economies and
payment platforms.7
In our 2022 scan, we discussed embedded payments, noting
that the embedded nance market wasexpected to exceed
$138bby 2026. In retrospect, that gure was conservative,
with gures now indicating US $148 billion in 2025 and over
US $197 billion in 2026.8
As businesses and consumers look to decrease the costs of
making and receiving a payment, including costs incurred
while waiting for payments to move from purchaser to
seller, there is an increasing trend towards low-cost, secure
account-to-account payments facilitated by wallets and
super-apps such as Alipay and WeChat. These platforms make
6 https://www.aciworldwide.com/real-time-payments-economic-impact-and-nancial-inclusion
7 https://openknowledge.worldbank.org/server/api/core/bitstreams/95fe55e9-f110-4ba8-933f-e65572e05395/content
8 Embedded Finance Market Size to Reach USD 1,732.53 Bn by 2034
transactions more convenient and accessible, including the
ability to pay across borders.
Australia launched its New Payments Platform (NPP) in 2018,
but adoption has remained slower than expected. According
to the July 2024 Consumer Data Right Strategic Review,¹³
uptake has been hindered by limited customer awareness,
high compliance costs deterring some banks and ntechs, and
a regulatory-led approach that didn’t fully consider customer
needs. While there has been an announcement that more
transactions may be moved to NPP to encourage adoption,
that decision is currently under review. This contrasts with
markets like Brazil and India, where simple, low-cost solutions
and strong incentives drove rapid adoption.
For Aotearoa, this highlights the importance of designing
future payments infrastructure that is customer-
centric, low-cost, and supported by strong market
incentives rather than relying solely on regulation.
Key takeaways
Embedded payments and account-to-account solutions
are becoming standard, improving user experience and
reducing costs for businesses and consumers.
Digital payment integration not only simplies the
purchasing journey for customers but also fosters
greater engagement and satisfaction, ultimately driving
loyalty and increasing revenue for businesses.
Key trends
Digital platforms are rapidly becoming a global
standard, providing customers with transactions
that are instant, secure, and seamless. To meet this
demand for convenience, digital platforms and apps
are embedding payment capabilities directly into their
services, removing friction from the payment process
and improving customer experience.
Regulatory pressure in many countries is driving
greater collaboration between ntechs, banks, governments,
and payment organisations to ensure safe, resilient, and
innovative payments infrastructure. A major focus of this
collaboration is enabling secure digital identity solutions to
support faster, more trusted transactions.
It’s crucial to recognise the rapid shift towards a digital world.
This transition is fundamentally changing the way we interact,
transact, and build relationships. Embracing digital solutions
will enable the industry to deliver safer and more seamless
payments experiences that meet customer and regulatory
expectations.
Global examples
Digital payments platforms underpin economic growth
by enabling faster, more secure transactions that boost
consumer spending and business activity. Platforms like India’s
Unied Payments Interface (UPI), which has been noted as
saving the Indian economy approximately INR 5.5 lakh crore
(NZD $10.45 billion) since its inception3 and real-time payment
systems are becoming staples in major markets worldwide.
3 India’s Unied Payment Interface’s impact on the nancial landscape | World Economic Forum
4 World Bank Digital Progress and Trends Report 2023
5 https://cfo.economictimes.indiatimes.com/news/economy/upi-digital-payments-over-16-5-billion-transactions-worth-23-49-lakh-crore-processed-in-oct-24/115887869
Real-time digital payment systems are now available in almost
every major market around the world. Real-time payments have
proven to have a positive impact on GDP and nancial inclusion.
It has been estimated that by 2028, 167.2 million people
previously excluded from the nancial system could have bank
accounts.4 As Aotearoa transitions to the next generation
of paymentsit stands to gain immensely by learning from
other jurisdictions how to move quickly and yet stay safe. For
example, Brazil’s PIX real-time payments system keeps things
simple and allows payments using phone numbers and email
addresses. The Central Bank of Brazil made participation of PIX
compulsory for the major banks and free for consumers. This
has had a transformative eect on Brazil’s economy. In 2016,
only 35% of those living in poverty had bank accounts, but that
gure is now closer to 90%, or more than 160 million Brazilians.
India has also beneted economically through the
introduction of UPI. Developed by the National Payments
Corporation of India, in October 2024, UPI processed 16.58
billion transactions (a 45% year-on-year increase). More
recently, January 2025 set a new record with nearly 17 billion
transactions.5 This has had a notable impact on nancial
inclusion, particularly in terms of access to credit, and has also
fostered innovation.
Digital embedded payments are payment capabilities
seamlessly integrated into a digital platform, app, or service,
allowing customers to complete transactions without being
redirected to a separate checkout page or external provider.
They make the payment process frictionless by keeping the
customer within the same user experience—for example,
paying directly in a rideshare app, an online marketplace, or
a subscription platform—while ensuring speed, convenience,
and security. By streamlining the checkout process, they
Digital
payments
platforms
underpinning
economies
98 2025 Environmental Scan Report
Financial institutions globally
are exploring tokenised
instruments, driving innovation
in how value is represented,
transferred, and settled.
There are three main categories in the context of tokenised
money and payments: CBDCs, tokenised deposits and
stablecoins. All of these tokenised forms of money and
payments utilise the functional benets of distributed ledger
technology (DLT), including the use of smart contracts and
programmable payments. This unlocks a lot of innovation,
enabling more secure, ecient, and accessible nancial
transactions.
CBDCs
CBDCs are centrally issued digital forms of national currency
designed to modernise money and payments. They aim to
improve settlement speed, lower costs, and expand nancial
inclusion while introducing new policy and operational
challenges. According to the IMF, over 90% of central banks are
exploring CBDCs, with around two-thirds considering issuing a
retail version in the short to medium term.9
9 Central Bank Digital Currency Tracker - Atlantic Council
10 Citi Develops New Digital Asset Capabilities for Institutional Clients
Tokenised deposits
Tokenised deposits extend the functionality available to
bank customers by oering programmable capabilities that
can streamline cash and trade nance operations and make
nancial transactions more ecient and secure. Tokenised
deposits (as opposed to tokenised bank accounts) are digital
representations of customers’ deposits.
Tokenised deposits do not change the nature of the
underlying asset, being the customers’ deposits held in their
bank account. As such, they do not change the construct of
existing commercial bank money. However, representing those
bank deposits in a tokenised form unlocks new functional
capabilities, and can see the transfer of money and its
settlement be completed in the same action.
By oering the programmable
capabilities of tokenised
deposits, customers can make
nancial transactions more
ecient and secure.
In the last couple of years, interest in tokenised deposits has
surged, with regulatory bodies increasingly paying attention
to its potential. For instance, the UK’s Regulated Liability
Network has delivered a pilot that includes multi-bank shared
ledger for tokenised commercial bank deposits. In 2024, Citi
Token Services launched a service for worldwide commercial
transactions, combining tokenised deposits with smart
contracts to streamline cash and trade nance operations.10
Key trends
Adoption of tokenisation is rapidly moving beyond
crypto into mainstream nance, enhancing security,
eciency, and programmability in transactions.
Growth in tokenised money instruments including
Central Bank Digital Currencies (CBDCs), tokenised
deposits, and stablecoins. These instruments are
reshaping money and payments, with increasing global
regulatory attention and infrastructure pilots (e.g. UK’s
Regulated Liability Network).
Stablecoins are gaining attention and regulatory
focus with the demand for at-backed stablecoins
rising as users seek safer alternatives in digital nance,
prompting regulatory bodies and traditional nance
(TradFi) institutions to explore clearer frameworks and
collaborative models.
Tokenisation is now rapidly advancing into mainstream nance.
Beyond its recent notoriety in digital assets, tokenisation is
transforming money and payments by enhancing security,
enabling programmability, and improving transaction
eciency. Financial institutions globally are exploring
tokenised instruments—from central bank digital currencies
(CBDCs) to tokenised deposits and stablecoins—driving
innovation in how value is represented, transferred, and
settled.
Tokenisation converts physical or digital assets into secure
digital tokens that can be traded online. Typically issued on
private blockchains, tokens reduce fraud risk, protect sensitive
data, and enable seamless, programmable transactions.
Tokenisation also allows fractional ownership of high-value
assets and supports smart contracts that automate and
enforce agreements, driving eciency and innovation across
payments and broader nancial services.
Tokenisation of credit cards and bank accounts
Tokenisation of credit cards has been around for some time
now, replacing the actual card number with a tokenised
16-digit number to protect sensitive data. The Payment Card
Industry Data Security Standard (PCI DSS) has been in place
even longer. In Aotearoa, bank account payments via open
banking are gaining traction through solutions like Worldline’s
Online EFTPOS, which enables one-click approval of account-
to-account payments by sending a request to the customer’s
banking app—using a mobile number simply to route the
request, not to tokenise the account.
While tokenisation of payment cards (e.g., replacing card
numbers with secure tokens for recurring or digital wallet
transactions) is well-established globally, the tokenisation
of bank account numbers remains nascent and is not yet
mainstream in Aotearoa. The Financial Markets Authority is
exploring tokenisation’s role in the nancial system, but no
large-scale deployments have been launched to date.
The rise of
tokenisation
1110 2025 Environmental Scan Report
dollar or high-quality liquid assets, enforces clear reserve
disclosure protocols, and provides stablecoin holders
with enhanced protections in bankruptcy proceedings.17
Meanwhile, in Hong Kong, the stablecoin bill has been passed,
laying the groundwork for a local regulatory framework.18
These regulatory actions are designed to address risks but
also facilitate the further growth of stablecoins, providing
regulatory tailwinds. Regulators across the globe are
addressing the growth of stablecoins and considering policy
implications around emerging systemic risks and ensuring
equivalent regulatory outcomes (i.e., avoiding regulatory
arbitrage that favours stablecoins).
17 The GENIUS Act: A Framework for U.S. Stablecoin Issuance | Insights | Sidley Austin LLP
18 https://www.lowyinstitute.org/the-interpreter/china-america-stablecoin-race-could-reshape-global-nance
Key takeaways
Tokenisation reduces fraud and enhances
eciency by replacing sensitive data with secure
tokens, improving transaction safety and enabling
programmable nancial processes.
CBDCs, tokenised deposits, and stablecoins are
reshaping money and payments, with stablecoin
transaction volumes now surpassing major card
networks.
Central and commercial banks are accelerating pilots to
improve nancial inclusion, automate settlements, and
unlock new payment capabilities.
Regulatory frameworks are rapidly evolving, in markets
such as the US, UK, and Hong Kong, to support safe
adoption and manage systemic risks as tokenised
nance scales globally.
Stablecoins
Stablecoins have surged in usage and relevance. In Q1 2025,
total stablecoin transaction volumes surpassed Visa’s global
card transaction volumes for the rst time, growing by around
30% quarter over quarter.11 In 2024, stablecoin transfers
reached approximately US $27.6 trillion—exceeding the
combined volumes of Visa and Mastercard.12
More recently, in August 2025, despite the volatility
experienced across broader crypto markets, the stablecoin
sector witnessed an impressive surge in transaction volumes,
which jumped by a staggering 92%, reaching a total of $3
trillion.13
Historically stablecoin activity has remained outside traditional
nance, embedded in decentralised nance (DeFi) and crypto
trading ecosystems, with TradFi and banks performing on/
o ramps between bank accounts and stablecoin issuers.
However, a material shift is occurring where stablecoin value
transfers are disintermediating traditional bank account-to-
account based payments.
Payment service providers are developing, at pace, capabilities
to enable merchant payouts using stablecoins. For example,
Worldpay are partnering with stablecoin platforms (BVNK) to
enable merchant payouts using stablecoins, and Stripe has
announced stablecoin business accounts in over 100 countries.14
The instability and turbulence in the crypto market in the last
few years, marked by the failures of Terra, FTX, and several
crypto-servicing US banks, signicantly aected the growth
11 Cryptopolitan, Stablecoins Surpass Visa’s Global Transaction Volumes in Q1 2025; Holder.io, Stablecoin Transaction Volume Surpasses Visa Q1 2025
12 Cointelegraph, Stablecoins Beat Visa & Mastercard 2024 Volume
13 news.bitcoin.com August 2025
14 https://stripe.com/blog/introducing-stablecoin-nancial-accounts
15 Some US Banks Explore Venturing Into Crypto With Joint Stablecoin, WSJ Reports
16 The GENIUS Act and law of unintended consequences: Are stablecoin issuers going to be boxed out of bankruptcy? | Reuters
of unbacked stablecoins, positioning at-backed stablecoins
as a more secure and viable alternative for investors seeking
stability and assurance. These stablecoins, pegged to
traditional at currencies, oered a semblance of security
in the less reliable crypto market. The shift to more stable
oerings underscores the market’s demand for more robust
and dependable digital assets. This evolution highlights the
critical role of stability and trust for customers worldwide, and
is shaping the future of nancial innovation.
Interest in tokenised deposits
has surged, with regulatory
bodies increasingly paying
attention to its potential.
TradFi institutions are beginning to respond. JP Morgan and
Citi have issued their own stablecoins for non-US tokenised
deposit activities. However, these go-it-alone initiatives lack the
network eects to scale eectively. A consortium of American
banks are considering whether to team up to issue a joint
stablecoin to fend o escalating competition from the DeFi
stablecoin and cryptocurrency industries.15
Regulatory activity surrounding stablecoins is now both
enabling growth and addressing risks. In July 2025, the U.S.
enacted the Guiding and Establishing National Innovation
for U.S. Stablecoins Act (GENIUS Act), establishing the rst
federal regulatory framework for stablecoins.16 The Act
mandates that only approved permitted payment stablecoin
issuers can operate, requires a one-to-one backing with U.S.
The rise of
tokenisation
1312 2025 Environmental Scan Report
sophisticated attacks, including phishing and whaling scams.
Similarly, the proliferation of IoT devices—often lacking strong
security—creates new vulnerabilities that criminals can exploit
to access sensitive data.
Quantum computing and future risks
Recent breakthroughs in quantum computing have drawn
global attention. Quantum technology promises to solve
complex problems exponentially faster than traditional
machines, with potential applications in payments and
security. The World Economic Forum notes its transformative
simulation and modelling capabilities across industries.21 In
February 2025, Amazon Web Services introduced ‘Ocelot,’ a
quantum chip expected to reduce quantum error correction
costs by 90%, including for payments applications.
Governments are preparing for quantum’s impact: China, the
US, South Korea, and India are allocating signicant budgets to
quantum readiness. India’s 2023 ‘National Quantum Mission,’
for example, dedicated Rs 6,000 crore (NZ$1.14 billion) to
research and infrastructure.22
21 World Economic Forum Transitioning to a Quantum-Secure Economy Whitepaper September 2022 National Quantum Mission
22 United Nations, Money Laundering: Overview,
Looking ahead
These converging technologies will change the way we interact
with payments into the foreseeable future. Beyond 2025, we
will witness the immense potential of adjacent and mutually-
connected benets as open nance and instant payments
unlock new revenue streams and customer experiences,
providing market players and customers with on-demand
utility and fullment.
Key takeaways
Emerging technologies like AI, IoT, and digital wallets are
rapidly transforming global payment systems, driving
eciency and new customer experiences.
AI strengthens fraud detection but simultaneously
enables more advanced cyberattacks, requiring
continuous security innovation.
The proliferation of IoT devices introduces additional
vulnerabilities that criminals can exploit to access
sensitive nancial data.
Quantum computing oers transformative
processing power but poses signicant risks to existing
encryption, highlighting the urgent need for quantum-
safe security standards.
Key trends
AI is becoming ubiquitous, seamlessly integrating into
various aspects of daily life, from smart assistants
to healthcare and nance, with fraud detection in
particular beneting.
IoT is rapidly growing, with more devices being
interconnected to streamline and enhance payment
processes, making transactions faster and more
convenient.
Quantum computing is advancing rapidly and many
large technology companies such as IBM, Amazon
Web Services, and Microsoft are working to advance
quantum computing.
The increasing usage of digital wallets is transforming
payment methods, making transactions more secure,
faster, and convenient for users worldwide.
Over the past decade, we have seen the emergence of mobile
wallets, Bitcoin and more recently, CBDCs being progressed
across the globe. In the Digital payments platforms
underpinning economies section within this report, we
discuss how payment methods are constantly evolving.
In the past year, we have seen application of digital wallets
expanding beyond in-app and online transactions to include
the ability to make purchases in physical retail locations. Digital
wallets are increasingly integrating into consumer purchasing
behaviours as they oer today’s consumers and businesses
a seamless and convenient alternative to traditional wallets.
Overall adoption has increased almost 10% in ve years
19 McKinsey & Company, State of consumer digital payments in 2024
20 Digital banking in the articial intelligence era: Strategies for serving nonhuman customers | HSTalks
(from 19% in 2019 to 28% by 2024).19 According to McKinsey,
this rise in adoption signies a market potential estimated at
approximately US $10 trillion.
AI and nancial crime
AI has become increasingly mainstream for nancial
institutions. David Birch, a commentator on digital nancial
services, and Kirsty Rutter, a corporate venture investor, have
suggested that we are approaching an era where customers
will freely utilise AI, employing ‘bots’ to perform transactions,
analyse oers, and make decisions. They further note that this
shift will signicantly impact banks’ bottom lines, as consumer
decisions and the eciency of implementing these decisions
will be vastly eased.20
The rise in the use of technology-enabled payment
methods over the past decade have been accompanied by
a corresponding increase in nancial crime—almost 2-5% of
global GDP is laundered each year. Many payment service
providers (PSPs) have been leveraging machine learning
to mitigate fraud for some years. Recent mass adoption of
AI, with its ability to analyse large and complex data sets,
has enabled the development of advanced fraud detection
tools that improve accuracy, authentication, and eciency.
AI enables organisations, governments and territories to
eectively and eciently share information aimed at mitigating
cross-border crime. The Monetary Authority of Singapore’s
COSMIC platform, Transaction Monitoring Netherlands, and
the TriBank pilot in the UK are all examples of AI-enabled
collaborations to mitigate cross-border crime.
Yet AI is a double-edged sword: while it enhances fraud
detection, it also empowers cybercriminals to launch more
Emerging
technologies
& next
generation
payment
methods
1514 2025 Environmental Scan Report
systems. An example is the formation of the Japan-Australia
Cross-Border Interoperability Working Group, formed in
2024 to explore cross-border digital identity interoperability,
which is investigating whether technical, legal and commercial
requirements to ensure interoperability between the two
countries is possible.27
Digital identity in Aotearoa
Research by Digital Identity NZ (DINZ) reveals that 90% of
New Zealanders favour having more control over their digital
identity information, indicating strong user preference for
decentralised systems.28
Payments NZ together with DINZ has begun work to frame
the next steps and focus areas of a unique digital identity
experience for Aotearoa, including cultural considerations,
delivery principles, consideration of the challenges and
opportunities, and delivery principles.29
As well as supporting actual payment transactions, digital
wallets can support digital identity using security features
such as biometric authentication and encryption, reducing
the risk of fraud and enhancing overall security. Digital
wallets can also be used to hold other identities, such
as driver’s licences, or providing proof of age or address
without needing to share personal data.
Slow or fragmented rollouts of digital identity have been found
to increase the opportunity for identity fraudsters utilising AI
to perpetrate the fraud.30
27 https://www.biometricupdate.com/202406/australia-and-japan-showcase-cross-border-veriable-credentials.
28 https://digitalidentity.nz/wp-content/uploads/sites/25/2023/02/Digital-Identity-in-Aotearoa-Report_nal.pdf
29 https://www.paymentsnz.co.nz/our-work/payments-direction/
30 https://www.biometricupdate.com/202501/how-ai-fraudsters-are-capitalizing-on-the-slow-rollout-of-digital-ids
Key takeaways
Rising fraud and increasingly sophisticated AI-
enabled attacks are accelerating the need for trusted,
government-backed digital identity frameworks to
protect individuals, businesses, and economies.
Inclusive and culturally aware digital identity design is
critical for equitable access.
In Aotearoa, the DISTF Act and collaborative industry
eorts are laying the foundation for a uniquely local,
culturally informed digital identity experience.
Digital wallets and biometric authentication oer
additional fraud protection and convenience, while
public support for decentralised identity control in
Aotearoa signals strong readiness for adoption.
Key trends
Rising fraud drives demand. The surge in
sophisticated fraud attacks is accelerating the need for
secure, government-backed digital identity frameworks
to protect individuals and businesses.
Global momentum toward interoperable digital
identity systems as countries are developing national
digital identity strategies with increasing emphasis on
cross-border interoperability, as seen in initiatives like
eIDAS 2.0 and the Japan-Australia working group.
Inclusive and culturally aware digital identity
design as nations are embedding cultural and equity
considerations into digital identity systems—such as
Australia’s WUNA—to ensure access and relevance for
diverse populations.
Fraud and digital identity
Sophisticated fraud attacks, increasingly powered by AI, are
driving urgent demand for trusted digital identity frameworks.
Governments and industry leaders worldwide are developing
secure, government-backed solutions to verify identities,
reduce fraud, and protect individuals and businesses. At the
same time, there is growing momentum for interoperable
systems that work seamlessly across borders, alongside a
strong focus on culturally inclusive design to ensure equitable
access for diverse communities.
23 Digital Identity Services Trust Framework Act 2023 No 13, Public Act – New Zealand Legislation
24 Digital, Telecommunications and Banking
25 eIDAS 2.0 | Updates, Compliance, Training
26 https://connectid.com.au/wp-content/uploads/2024/12/Identity-in-Crisis_Addressing-the-Gaps-for-Aboriginal-and-Torres-Strait-Islander-Peoples.pdf
Global momentum and interoperability
A large number of governments worldwide are building
their digital identity policies. In Aotearoa, the Digital Identity
Services Trust Framework (DISTF) Act 2023 came into eect
in July 2024, establishing guidelines for the delivery of
secure digital identity services aimed at protecting individual
information.23 In addition, the former Minister of Commerce
and Consumer Aairs, Andrew Bayly, sent open letters
to the digital, telecommunications and banking sectors,24
encouraging them to take the lead in initiatives to address
online fraud.
Many countries are grappling with the challenge of ensuring
digital identity is open and equitable to all, and caters to the
needs of dierent groups. Europe released eIDAS 2.0 in April
2024, which mandated all member states to oer a digital
identity wallet, ensuring interoperability across the EU by
2026.25
Cultural inclusion and equity
In Australia, WUNA26 has provided Australia’s First Nations
people with culturally appropriate and government supported
digital identity which incorporates Indigenous customs and
practices. In addition, it is also a platform that oers proof
of ancestry, thus addressing the unique challenges the First
Nations people face in the current identity system.
Although digital public infrastructure is shaped by the unique
political and sociocultural contexts of each country, we are
seeing global standardisation gaining momentum and greater
shifts towards national and international interoperability of
Digital
identity for
consumers
and
businesses
1716 2025 Environmental Scan Report
Illustrating how payments are being aected, in March 2023,
the UK’s Financial Conduct Authority (FCA) sent a letter to
CEOs of companies34 registered under the Payment Services
Regulations 2017 (PSRs) and the Electronic Money Regulations
2011 (EMRs), such as Payment Institutions (PIs), Electronic
Money Institutions (EMIs) and Registered Account Information
Service Providers (RAISPs), telling them they should take action.
Regulatory reforms in Aotearoa
In Aotearoa, the industry is working closely with regulators
and providing deep industry expertise and knowledge to
ensure our payments system is best-in-class. The regulatory
landscape has changed signicantly in recent years:
• The Retail Payments System Act 2022 came into force in
May 2022, establishing a new regulatory regime for our
retail payment system.
• In July this year, the Commerce Commission published the
nal pricing standard for Mastercard and Visa interchange
which comes into eect 01 December 2025.35
• On 31 March 2025, the Financial Markets Conduct
Amendment Bill was introduced into Parliament. It makes
changes to the Conduct of Institutions (CoFI) regime for
easier compliance. The Bill passed its rst reading on 21
May 2025, submissions to the changes closed on 3 July, and
a report is expected in November.
• The Reserve Bank of New Zealand is proposing to
recommend that the Minister of Finance designates
Payments NZ’s High Value Clearing System under the
Financial Market Infrastructures Act 2021. The Reserve
Bank is currently consulting on the proposal.
34 https://www.fca.org.uk/publication/correspondence/priorities-payments-rms-portfolio-letter-2023.pdf
35 https://comcom.govt.nz/__data/assets/pdf_le/0032/367457/Retail-Payment-System-Interchange-fee-regulation-for-Mastercard-and-Visa-networks-Final-Decision-and-Reasons-
Paper-17-July-2025.pdf
Key takeaways
Fraud and scams are becoming increasingly
sophisticated, outpacing traditional regulatory
approaches and requiring more agile, tech-driven
responses.
Regulatory readiness varies globally, with signicant
gaps in awareness and preparation for emerging
frameworks such as the Digital Euro, PSD3, and FiDA.
Fragmentation across jurisdictions highlights the need
for greater international coordination and harmonised
oversight.
Close collaboration between regulators and the
nancial industry is critical to designing eective
policies that balance safety, innovation, and
competition in payments.
Key trends
Technological advancement outpacing regulation.
The rapid evolution of AI and machine learning is
signicantly improving payments systems but also
escalating fraud risks.
Rising global focus on consumer protection and
risk management. Governments worldwide, notably
the UK, are introducing stronger consumer protections
like Authorised Push Payment fraud reimbursement.
Regulatory bodies are intensifying oversight, with
growing emphasis on safeguarding customer’s money,
ensuring nancial integrity, and fostering innovation.
Ongoing regulatory reform and industry
collaboration. In Aotearoa and abroad, there is a
trend toward evolving payments regulation to reect
deeper collaboration between regulators and the
nancial industry.
Global regulatory responses
The rapid evolution of technology, particularly AI and
machine learning, is transforming payment systems
worldwide. While these innovations improve speed, security,
and eciency, they also introduce more sophisticated
fraud risks. Governments and regulators are faced with
the challenge of how to keep pace, requiring constant
31 https://www.psr.org.uk/news-and-updates/latest-news/news/psr-conrms-new-requirements-for-app-fraud-reimbursement/
32 https://www.ey.com/en_gl/insights/nancial-services/emeia/how-european-banks-compare-on-readiness-for-eu-payments-regulations
33 https://www.mckinsey.com/~/media/mckinsey/business functions/risk/our insights/the future of the payments industry how managing risk can drive growth/the-future-of-the-
payments-industry-how-managing-risk-can-drive-growth_nal.pdf?shouldIndex=false
policy updates and stronger collaboration with the nancial
industry to protect customers and maintain trust in the
system.
Industry readiness
Discussions on consumer protection and risk are gaining
traction worldwide, particularly following the UK government’s
decision to implement the Authorised Push Payment (APP)
fraud reimbursement requirement in 2023.31
The ability of banks and payments services to meet regulation
in a timely manner, manage risks and controls appropriately
and also keep abreast of the regulations themselves is
proving to be a constant battle. EY undertook an assessment
of bank readiness for new EU payment regulations in early
2024, which showed respondents had relatively high levels
of awareness of SCT, PSD3 and PSR. However awareness of
digital euro and FIDA regulations was notably low, with 44%
indicating low to no awareness at all.32
Regulators are striving to
keep pace, while payments
ecosystem players must
continuously adapt.
Further research has highlighted that in the competitive
landscape of the payments industry, de-risking the transaction
is intensifying through regulatory oversight.33
Navigating
nancial
services and
payments
regulation
1918 2025 Environmental Scan Report
More evident in the past two years, countries are converging
on hybrid open banking frameworks where the industry
leads with a mindset of creating value and driving uptake,
while regulators act as a backstop. In the UK, a commercial
scheme is being established for variable recurring open
banking payments.40 Also in the UK, a Smart Data Group
industry-led body was launched to champion the rollout of
around smart data schemes.41
Progress in Aotearoa
In Aotearoa, the four largest banks have recently adopted
Version 2.3 of the API Centre’s Payment Initiation standards,
with Kiwibank scheduled to follow in 2026. Version 2.3
encompasses enduring consent for payments, decoupled
authentication to open up opportunities for in-person
payments, and further account information, which are
fundamental open banking standards.
Open banking
The initial phase of open banking in Aotearoa focused on
bank-held payment account data, allowing customers to
securely share this information with third-party providers via
APIs. This phase enables new payment services and account
aggregation tools but remains largely conned to banking
products.
Open nance
As the concept matures, it expands beyond payments and
deposits to include broader nancial products, such as
mortgages, savings, investments, pensions, and insurance.
Open nance aims to give consumers and businesses a
unied, consent-driven view of their entire nancial footprint.
40 OBL launches public consultation on the MLA for commercial variable recurring payments - Open Banking
41 Smart Data Group launches in UK as Data (Use and Access) Bill agreed
Open data ecosystems
The next evolution moves beyond nancial services to
enable secure data sharing across multiple sectors—
including energy, telecommunications, retail, and healthcare.
This cross-industry integration supports highly personalised,
seamless services and a fully interconnected digital
economy.
Key takeaways
There is a shift toward open data ecosystems as
economies transition from open banking to cross-
sector, data-driven ecosystems that deliver integrated
services beyond nancial products.
Hybrid regulatory models are emerging with many
countries adopting mixed approaches where industry-
led innovation drives uptake, with regulators providing
oversight and stability.
Mature open banking markets are reporting tangible
consumer and economic benets, including reduced
costs, faster lending decisions, and improved fraud
prevention, with adoption rates in markets like the UK
reaching 20% of consumers.
Aotearoa is laying foundations with the adoption of our
API Centre’s Version 2.3 standards. Aotearoa is building
core capabilities for enduring consent, decoupled
authentication, and account information access —
critical for future open ecosystems.
Key trends
Shift from open banking to open data ecosystems
as global economies transition from traditional open
banking to broader open data frameworks that span
multiple sectors (e.g. energy, telecommunications,
insurance), enabling more integrated and personalised
customer experiences.
Strong regulatory foundations driving innovation as
countries embed open nance within robust regulatory
or self-regulatory frameworks to ensure secure data
sharing, consumer protection, and nancial stability while
enabling innovation to ourish.
Industry collaboration as a catalyst for ecosystem
growth as cross-sector collaboration is increasingly
seen as essential for building successful open
ecosystems, with APIs and enabling frameworks
enabling broader industry partnerships and more
value-added services.
Globally, economies are moving beyond traditional open
banking models toward integrated open data ecosystems.
These ecosystems enable businesses and consumers to
securely share data across multiple sectors – such as energy,
telecommunications, insurance, and non-bank lending –
delivering more personalised, ecient, and interconnected
services.
36 https://www.oecd.org/en/publications/shifting-from-open-banking-to-open-nance_9f881c0c-en.html
37 MasterCardsignals Q1 2025– From single-function identity applications to access all areas
38 Mastercard trusted innovation partner– re open banking
39 The UK’s Department of Business & Tradestateddata mobility, including open banking,could increase GDP by £27.8 billion per year
According to an OECD survey, many countries are actively
progressing their open banking initiatives, embedding
them within strong regulatory frameworks to support
innovation while ensuring secure data sharing and consumer
protection. This evolution is accelerating broader ecosystem
development, setting the stage for more cross-sector
collaboration and value creation.36
Global shift to open ecosystems
The evolution of open ecosystems has had a reinforcing
eect on other macro trends such as embedded nance,
hyper-personalisation, digital safety, and the interconnected
digital economy. Organisations have begun leveraging open
banking capabilities to strengthen their propositions and
continue to advocate for integration of digital identity37 and
other safety measures into open ecosystems.38
Maturity and measurable benets
Signicantly, many countries have now reached a level of
maturity that allows them to quantify both economic and
customer benets.39 Third-party providers are reporting
reduced paperwork, faster lending decisions, minimised data
sharing, and eorts to reduce fraud and KYC operational
costs. Uptake of open banking payments in the UK continues
to grow year-on-year, reaching one in ve consumers as at
March 2025 and reporting 67% annual growth in the number
of payments initiated.
Hybrid models and regulatory roles
The move towards open ecosystems is consistent for
regulatory, hybrid and industry-led open data frameworks.
From open
banking to
open data
+64 4 890 6750
payments.direction@paymentsnz.co.nz
www.paymentsnz.co.nz
