Instant payments conundrum: Would superfast bank payments be a scammer’s delight?
Friday, 13 February 2026
ANALYSIS: Should New Zealand even be aspiring to instantaneous banking transactions?
A growing list of countries like the UK and Singapore have superfast banking payments, in which a bank (or non-bank) payment instantly moves money.
In New Zealand, there can be a delay of as much as 30 minutes, and some critics have pointed to that as evidence of a failure of the banking sector to invest in modernising their systems, instead shipping huge dividends to its largely Australian shareholders.
Adrian Smith, chief executive of Fintech payments BlinkPay, believes instant payments could be introduced, and introduced safely, without a spike in scam and fraud losses, as happened in the UK after instantaneous payments came in.
But Parliament’s Finance and Expenditure Select Committee heard on Wednesday from Westpac chief executive Catherine McGrath, who took a different view, citing the UK experience.
“We process every 30 minutes at the moment in New Zealand, which is very different to the UK before they put faster payments in place,” McGrath said.
“It wouldn't be beyond the realm of possibility to get that same existing system [New Zealand’s current system], for example, to process every 10 minutes.”
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McGrath said: “I think it's important to have a pause [in each payment], both for consumers, and for banks to make sure that we can catch transactions that aren't intended to go.”
That pause would allow time for banks’ anti-fraud systems to attempt to detect, and block, transactions.
“If I look at the UK, I don't think they've got the balance right,” McGrath said.
In its written submission to the committee, Westpac said: “Overseas experience in the US, UK, and Brazil has shown a strong relationship between the introduction of fast payment systems and an increase in fraud and scams.”
Westpac’s own experience showed criminals moved money to jurisdictions with extremely fast settlement times, such as Portugal, to avoid detection and complicate recovery, the bank told MPs.
McGrath said: “When you see all of them being routed into one particular jurisdiction because of the speed at which that money can bounce out and never be caught, it makes you quite thoughtful about the 10-minute pause versus the instant.”
“We need to have a really good discussion on faster payments, that says, ‘What's the business case for it, and where will it make a difference? Can we get to the same result through using our existing rails and just speeding them up?” she told MPs.
Bank fraud systems questioned
There remain concerns, some of which were aired in the select committee hearing, that bank fraud systems and government policy are lacking, even without a move to real-time, instant payments.
NZ First MP David Wilson, a member of the committee, was suspicious about whether banks were already failing to do all they could to prevent scam losses for customers.
Wilson questioned McGrath after she appeared to say banks were not sharing all the information they had about suspected money mules.
Mules are people using accounts to move money for criminals, often ordinary people duped into doing so, or doing it for a slice of stolen money.
McGrath said banks were starting to share information on suspected money mules, and that was “making a difference”, but she said there were limits on sharing.
“An example of a scams case where the details of the bank account that was a mule were shared. But, for privacy reasons, we weren't at that time able to share the name of the person and it turned out that person had accounts at many different banks,” she said.
Wilson put it to her that there was room within existing law to share that information, and “perhaps that hasn't been utilised as much as it could have been”.
McGrath admitted there was “plenty more” that could be done.
Redesign of scam defences needed
The Government has largely favoured not regulating in the fraud and open banking arena, instead preferring a partnership and oversight model in which government, and MPs engage with the sector, set expectation, and monitor whether things are moving in the right direction at an acceptable speed.
But that may not be enough.
BlinkPay’s Smith told MPs: “As New Zealand moves toward real-time payments, it is important that fraud and scam settings are designed with equal priority alongside speed and convenience.
“In a real-time network, fraud will also occur in real time, which increases the need for clear liability settings, effective prevention controls, and well-defined dispute and recovery processes.”
He said BlinkPay was building real-time transaction scoring as a defensive layer to help detect and reduce suspicious payment activity.
A key issue was “social engineering”, where scammers hoodwinked victims into making “authorised push payments”.
Under current banking sector scam policies, unless the bank is culpable in the payment being made, including having failed to pick up on obvious red flags that a person was being scammed, they are not responsible for compensating a scam victim for their losses.
Even Westpac appeared to have concerns about the current settings.
“As New Zealand considers the transition to real-time payments we need to ensure we do not give up our ability to keep customers safe without putting appropriate safeguards in place first,” the bank said in its written submission.
The bank also appeared to warn MPs that the introduction of superfast payments wasn’t coming soon, and would require a lot of investment.
“The move to real-time payments will require banks to make changes to their core banking capabilities, not just payments infrastructure,” it said. “Banks need to be at the table to help sequence and coordinate these changes to reduce risk and ensure the changes are done in the most effective and efficient way.”
Banks accused of going slow on technology
The hearings, which extend into next week with the chief executives of ANZ and ASB both scheduled to appear, are a continuation of last year’s Parliamentary banking inquiry.
MPs want to see progress from banks in areas like fraud defences, and also open banking, a term used for banks allowing fintech companies to engage with them, potentially bringing down the costs of banking, and bringing in faster, better banking services.
Fintechs told MPs that banks were going slow in working with fintechs, and that was slowing the uptake of their services.
Roy Chowdhury, founder of Homely - an online service where people can shop around for loans - told MPs banks were very slow to engage, despite Homely enabling them to bring on new borrowers faster, and more cheaply.
“The platform uses artificial intelligence and Open Banking technologies to streamline the home loan application process. Borrowers can complete a full credit application and apply to multiple lenders simultaneously with a single action in under 10 minutes. This model is the first of its kind in New Zealand and represents a significant shift in how consumers can access mortgage finance,” he said.
That could lead to cheaper home loans. But, he told MPs: “After many months of prolonged discussions, we are still awaiting meaningful participation from banks in our lender panel.
“Our experience is not unique. I can speak more broadly for the fintech sector, having participated in an accelerator programme alongside 14 other New Zealand fintech companies and through ongoing engagement with many others,” he said. “A common experience is slow, uncertain, and often stalled engagement with banks. The most frequent explanation provided is ‘limited internal capacity’ or ‘busy change calendars,’ which effectively delays or prevents collaboration.”
BlinkPay’s Smith made a similar point.
BlinkPay provides payment services, but its expansion was dependent on the speed at which banks accept new merchant users of its services.
“Adoption by New Zealand merchants is slower than it can be, which in turn dampens competitive momentum and delays the customer benefits open banking is intended to deliver,” he said.
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CORRECTION: An earlier version of this story incorrectly attributed comments made by Adrian Smith to founder Daniel Karehana. The Post apologies for this error.