ASB has partnered with payment platform POLi to allow customers to use it to make secure open banking-based payments. Photo: RNZ / Marika Khabazi
For a long time, consumers have been warned that using payment platform POLi could breach their banks' terms and conditions.
But now, one bank is partnering with POLi to allow customers to use it to make secure open banking-based payments.
POLi allows payments to be made to a merchant without a service such as a card provider in the middle.
It is used by many big-name brands in New Zealand, as well as government agencies.
But it requires people to provide their internet banking login, which the banks say may breach their terms and conditions.
But ASB said it had entered a partnership with POLi that would allow it to use ASB's open banking APIs, which meant customers could use it without their username and password.
Instead, customer authentication and authorisation would take place securely within the ASB mobile banking app.
The feature would become available as POLi merchants moved to open banking.
The service is only available for ASB customers at this stage.
ASB spokesperson Michael Maclean said POLi had the highest volume of online debit payments in the country.
"We know scale and widespread availability is key to getting Kiwi consumers onboard with open banking.
"The partnership is a win for our customers, offering them greater choice and improved security. It's been a big year for us in the open banking space, and we've achieved a lot we're proud of that supports safe and easy banking services in New Zealand, and helps to mitigate against fraud and scams.
"We initially went live with our open banking API platform in May last year, and we've now got six partnerships with different payments and data providers that can leverage the tech we've invested in."
He said ASB had been "between a rock and a hard place" wanting to provide customers with choice and options to make payments - such as POLi - and the need to protect them from potential fraud.
"It's less about terms and conditions and more about the behaviour and the risks associated with that behaviour.
"Once we've worked through this process and got all the merchants on board, we will be in a position to much more clearly and strongly articulate to our customers the risk of those behaviours that they're not endorsed and actually to be able to shut them down on our side as well.
"It's part of an open banking journey and our fraud and scams journey and we think it's a real positive step for both of those."
Mclean said if POLi had not been prepared to transition on to open banking, it might not have been able to continue to exist.
"Both corporates and banks would lose kind tolerance or or patience. Now there is a much safer alternative."
He said he would be surprised if other banks did not take a similar approach.
POLi's commercial director Andrew Simmonds said it had long advocated for open banking to offer consumers more choice and control.
"ASB is leading the way in this space as the first bank to offer up open banking APIs for our consumption and we're delighted to partner with them to provide Kiwi consumers an innovative and secure way to pay popular merchants."
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