POLi

POLi payments have become popular in New Zealand for online shopping. This system allows  people to pay directly from their bank accounts without using credit cards or other payment services. Australia Post created POLi, and now a company called Merco Ltd runs it in New Zealand. Many shops and government offices like POLi because it’s easy to use and can save money.

What are POLi payments?

POLi allows people to pay directly from their bank account to a shop or business without using a credit card. When a customer decides to use POLi for payment while shopping online, they are taken to POLi’s platform. There, they select their bank and enter their online banking username and password. POLi then transfers the money immediately from the customer’s account to the business. This quick process enables the business to provide goods or services right away. However, it does require customers to allow POLi to access their bank account information.

Using POLi can breach banks’ terms and conditions

Many people use POLi, but banks and consumer groups have concerns about it. The main problem is that POLi asks users to give their internet banking login information. This goes against what banks usually tell customers about keeping their details safe. Using POLi might break the rules set by banks like ASB, BNZ, and Westpac. ANZ and Kiwibank say that if you use POLi, they might not be able to protect you if something goes wrong with your online banking.

Consumer NZ says that about half of New Zealanders might have broken their bank’s rules by using POLi. This could be a problem because it might mean the bank won’t be legally required to assist  if someone steals money from their account. Instead, if the customer were to have a negative online bank experience, they may have to cover their financial losses themselves.

What do merchants that accept POLi payments say?

Many businesses like POLi. Companies such as Shine On, InterCity Group, and Pb Tech say POLi works well and helps them get more customers. They also find it reliable. Jetstar, an airline, likes that POLi fills in payment information automatically. This means customers are less likely to make mistakes when entering their details, reducing company time spent on correcting errors.

Is POLi safe?

There are different opinions about how safe POLi is. POLi says it takes security seriously and has certifications to prove it. They use special computer systems to protect users’ information. However, many experts and banks are still worried. The main concern is that POLi asks users to share their bank login details. This is in contradiction to what banks usually advise their customers in regards to keeping their information private. So while POLi has security measures in place, the fact that users have to share sensitive information makes some people uncomfortable.

What does POLi say?

POLi says it doesn’t keep usernames and passwords. They use secure internet connections for all communication. POLi claims their system has many checks to make sure transactions are correct and safe. They also have several layers of protection against online threats. POLi makes it clear that banks don’t approve or work with them. This information is written in the rules users agree to when using POLi.

POLi payments shut down in Australia

On September 30, 2023, POLi Payments came to an end in Australia. This happened as Australian banks grew wary of the service and customers started turning to alternative online payment methods. The introduction of a new payment system in Australia played a big part in making POLi less relevant. Major Australian banks gradually stopped supporting POLi, with the final bank pulling out in July 2023. These factors combined to make it challenging for POLi to continue its operations in Australia.

With POLi still active in New Zealand under Merco’s ownership, many are curious about its future. This situation has started conversations about online payments in the country as there’s a growing feeling that New Zealand could benefit from improved, secure, and speedy online payment options. Currently, the country lags behind others when it comes to fast payment systems. Experts suggest that fast payment options might not be available in New Zealand until 2030.

Many people feel unsure about using POLi in New Zealand because banks have said it might not meet their rules. This makes some worry they could lose their account protection if problems happen. Because of this, people want banks to either approve POLi or make new, reliable ways to pay quickly online.

If the service is not good enough for Australian banks, why is it good enough for New Zealand?

POLi continues to operate in New Zealand even though it has stopped in Australia. This situation raises questions about how banking systems and rules differ between the two countries. New Zealand seems to be behind in creating fast ways to pay online. A World Bank report from 2021 said New Zealand’s fast payment system was still being developed, similar to countries like Yemen and the Maldives.

This difference might mean that New Zealand’s banking system hasn’t yet reached a point where POLi is no longer needed, unlike in Australia. However, it also shows that New Zealand may need to work faster on creating new payment systems that are both safe and quick. These new systems should not ask users to share their bank login details, which is a concern with POLi.

Banking competition

POLi helps people avoid extra fees when paying online, which shows that New Zealand’s banking systems are not as advanced as in other countries. The Commerce Commission found that the banking sector is very profitable for a small group of banks, which led the New Zealand government to take action. 

The government plans to follow all 14 suggestions from the Commission’s report to increase competition. One important step is giving Kiwibank NZ$500 million to help it compete better with the four big Australian-owned banks. This money could help Kiwibank offer up to NZ$4 billion in loans to businesses or NZ$10 billion in home loans, which could push other banks to offer better deals. 

The government is also making sure the Reserve Bank focuses more on competition in banking through new rules and simultaneously they focus on making it easier for customers to switch banks and use different banking services. All these changes are meant to make banks compete more, which could lead to better services and possibly lower interest rates for people in New Zealand.