Latest / Best of Business / Jonathan Dale: BNZ Head of Payment Development on the surcharge ban, Payap

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Jonathan Dale: BNZ Head of Payment Development on the surcharge ban, Payap · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from Newstalk ZEDB follow this
• 0:13
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• 0:17
  Speaker 2: As we're discussing the government plans to scrap instore payment
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  Speaker 2: can't surcharges. By May twenty twenty six, B and ZED
• 0:24
  Speaker 2: used yesterday's news to promote its new open banking platform,
• 0:29
  Speaker 2: pay App. With pay App, customers can pay you directly
• 0:33
  Speaker 2: from their bank account. They use a dynamic QR code
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  Speaker 2: generated on the existing f POS terminal. Bn Zhead of
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  Speaker 2: Payment Development Jonathan Dale joins me, Now, very very good
• 0:44
  Speaker 2: morning to you.
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  Speaker 3: Good morning Carey.
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  Speaker 2: Were you just sitting there with this technology waiting for
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  Speaker 2: the government to make an announcement like this so you
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  Speaker 2: could leverage off it.
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  Speaker 3: No, we have been looking at how we could reduce
• 0:58
  Speaker 3: the cost payments for businesses for some time, and with
• 1:02
  Speaker 3: the emergence of open banking coming into the market, how
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  Speaker 3: we could use that new technology to facilitate that been
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  Speaker 3: something we've been looking at for some period of time and.
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  Speaker 2: This was just timely with the announcement.
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  Speaker 3: Yeah, we announced last year that we were looking at payout.
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  Speaker 3: We'd worked with a home growing New Zealand fintech center
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  Speaker 3: pay with this technology and indicated to businesses. So this
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  Speaker 3: would be a way to reduce a whole lot of
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  Speaker 3: different payment costs. And with the announcement yesterday, it was
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  Speaker 3: good to really highlight what some alternatives are in the
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  Speaker 3: market to make sure that all those businesses don't feel
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  Speaker 3: like all of a sudden they have to build that
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  Speaker 3: cost that there are alternatives that can put them in
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  Speaker 3: a good position for them and their customers.
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  Speaker 2: Well, it's a vastly different playing field for the big
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  Speaker 2: retail chains, for the big supermarkets, they can negotiate to
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  Speaker 2: get a better rate on fees, can't they, And with
• 1:53
  Speaker 2: their banks whoever they happen to be banking with. The
• 1:56
  Speaker 2: smaller dairies and business owners don't have that same wriggle
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  Speaker 2: room when it comes to negotiation.
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  Speaker 3: Well, that's the beauty of something like payapp is that
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  Speaker 3: it creates a real even playing field where you don't
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  Speaker 3: need economies of scale to get efficiencies on cost and
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  Speaker 3: that that flat rate that we've got for that is
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  Speaker 3: open to if you're a small business right through to
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  Speaker 3: large enterprise. And I think the real key thing for
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  Speaker 3: New Zealand businesses is also with a payment when you're
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  Speaker 3: making a payment as a consumer, you want it not
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  Speaker 3: just to be around what's the cost of purchasing something,
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  Speaker 3: but how do you create it as an opportunity for
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  Speaker 3: those small businesses to generate or spend in their store
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  Speaker 3: or people coming back to the store again and again
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  Speaker 3: and enhance that experience, and that some of the additional
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  Speaker 3: services that pay up give away from our traditional payment methods.
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  Speaker 2: So you've got a processing thing of zero point thirty
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  Speaker 2: nine percent, which is considerably less than the surcharges right.
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  Speaker 3: Now, yes, yeah, and that creates that opportunity for small
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  Speaker 3: businesses and large businesses to keep on keep on growing, Like.
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  Speaker 2: It makes so much sense to be able to use
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  Speaker 2: use a code or an app or what have you,
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  Speaker 2: and what the technology that you've developed makes so much
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  Speaker 2: sense to be able to go from my account to
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  Speaker 2: the retailer's account straight away with nobody clicking the ticket
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  Speaker 2: three or four times along the way.
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  Speaker 3: That's right. It does reduce the sort of intermediaries in
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  Speaker 3: the process, which we can then pass on that cost
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  Speaker 3: savings to all the businesses. But also it's using existing infrastructure.
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  Speaker 3: So if you're a business, then you've bought terminals of
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  Speaker 3: sale systems the last thing you want to do is
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  Speaker 3: have to invest in more technology to look at that.
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  Speaker 3: So by leveraging what people are used to, you know,
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  Speaker 3: their muscle memory, be it in a business or a consumer,
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  Speaker 3: we see that as a really good win.
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  Speaker 2: Is this a way of getting around the duopoly that
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  Speaker 2: Visa and MasterCard pretty much have worldwide because they've got
• 4:02
  Speaker 2: the existing networks of carrying all the information over the
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  Speaker 2: existing networks. To try and set up a rival network
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  Speaker 2: would be near impossible. It would just be prohibitively expensive.
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  Speaker 2: But is this a way of bypassing the duopolese networks?
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  Speaker 3: When New Zealand's been a bit of a leader in
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  Speaker 3: payment methods like FPOs in the eighties launching that and
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  Speaker 3: this is an extension of that where you can pay
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  Speaker 3: directly out of your bank account. Yeah, there's always going
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  Speaker 3: to be benefits for a worldwide payment method like Visa
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  Speaker 3: or a MasterCard, so that you're able to go over
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  Speaker 3: seas and have similar experiences and access those global markets.
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  Speaker 3: But this pay it really does offer a great domestic
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  Speaker 3: alternative for New Zealand businesses.
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  Speaker 2: And you had a trial of it, didn't use So
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  Speaker 2: were there any little things that needed to be ironed
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  Speaker 2: out when you did the trial of the app.
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  Speaker 3: There's always all revlins that come out when you needed trials.
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  Speaker 3: The big thing is getting people used to any type
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  Speaker 3: of change, and that's consumers walking into a store. So
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  Speaker 3: while they're using existing terminals, you are having to scam
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  Speaker 3: with your camera a QR code now while you don't
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  Speaker 3: actually need an app or anything, you just need to
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  Speaker 3: have a camera on a phone. That really is just
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  Speaker 3: retraining people, educating people on a different way of doing things.
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  Speaker 2: We're quite good at being early adopters when it comes
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  Speaker 2: to technology. I just become on something you said at
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  Speaker 2: the very beginning though, Jonathan, you said, you know, we
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  Speaker 2: want to be able to help with the cost of
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  Speaker 2: doing business for small retailers. Why not absorb the cost
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  Speaker 2: then if you really wanted to help small retailers.
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  Speaker 3: So when you look at the cost of pay app,
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  Speaker 3: it's really priced at a cost recovery or bare minimum
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  Speaker 3: of the new infrastructure that's coming through open banking and
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  Speaker 3: what we've tried to do there as well working with
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  Speaker 3: a great Kei fintech center, pay is expand the experience,
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  Speaker 3: which I've touched on for So if you were going
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  Speaker 3: in to buy your and you had a stamp card
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  Speaker 3: that's set on your fifth coffee, you get the six
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  Speaker 3: to one free digitizing that within the payment purchase. So
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  Speaker 3: it removes some of that other costs that the businesses
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  Speaker 3: have got around loyalty schemes, gift cards or receiving other
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  Speaker 3: forms of payment from other loyalty schemes. So when you
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  Speaker 3: combine that all together, you've actually significantly reduced overall cost
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  Speaker 3: of serving a customer for business. So that's really where
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  Speaker 3: our focus has been. How do you make the payment
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  Speaker 3: experience much more valuable, not just about paying a three
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  Speaker 3: percent or two percent surcharge for the takeaway in the weekend.
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  Speaker 3: How do you make it an incentive to go back
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  Speaker 3: to that takeaway next weekend?
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  Speaker 2: And just finally, when it comes to take up of
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  Speaker 2: the paypp app, how responsive has the market been.
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  Speaker 3: We've had really good responses from the market right across
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  Speaker 3: the board, from small businesses through the enterprise. Several thousand
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  Speaker 3: Mitchans loaded and active with paye now and continuing to
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  Speaker 3: roll that out over the coming months.
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  Speaker 2: All right, I thank you very much for your time.
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  Speaker 2: Jonathan Dale b and zhead of Payment Development. I think
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  Speaker 2: we're going to see a bit more of this. You know,
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  Speaker 2: B and z's done a good job of capitalizing on
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  Speaker 2: the government's announcement yesterday and launching the open Banking platform,
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  Speaker 2: but with the technology that exists, there will be room
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  Speaker 2: for many more opportunities like this. I think it's a
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  Speaker 2: great idea for.
• 7:38
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