The Commerce Commission (Commission) has reached a preliminary view that it should grant conditional authorisation to Payments NZ Limited (Payments NZ) to work with current and future API providers (ie, banks) and third parties (eg, fintechs) to develop and apply a partnering framework relating to the provision of API services by API providers to third parties (the Proposed Arrangement).
The Commission’s preliminary view is based on its assessment of the likely benefits and detriments arising from the Proposed Arrangement. The Commission considers that, subject to the proposed conditions, the potential benefits of the Proposed Arrangement are likely to outweigh the potential detriments. The benefits include the potential to reduce the transaction costs associated with partnering between API Providers and Third Parties for access to API Services, and the development of more efficient contract terms for such partnering. The potential detriments, which the conditions are designed to address, primarily relate to potential conflicts of interest in the partnering framework’s decision-making processes.
The Commission is proposing to authorise the Proposed Arrangement for an 18-month period, recognising that the applicants expect their discussions to take around 12 months and the anticipated timing of regulatory interventions that will likely deliver some of the same potential benefits as the Proposed Arrangement.
A copy of the Commission’s draft determination is available on the Commission’s case register here.
