We and many other fintechs were shocked when the draft legislation released in May 2025 indicated that banks could charge per API call for New Zealanders to have access to their data via open banking.
No other open banking regime in the world has a fee structure attached to it. New Zealand was on the precipice of eschewing global open banking norms — making it more closed than open, with financial gatekeeping. New Zealand was faced with low uptake of open banking and significant barriers put in the way of fintech innovation, resulting in worse outcomes for millions of Kiwis.
I was on Radio New Zealand’s Nine to Noon show discussing the good news, the morning after this announcement was made. If you’d like to listen to that (and hear a slightly more rambly version of what is discussed below), you can find the interview here on RNZ’s website.
Banks were to be allowed to charge one cent per API call, for access to open banking data, up to a maximum of $5 per month per bank. In this context, a single API call is the secure connection between your bank and PocketSmith to retrieve a single piece of information — what accounts you have, the balance for one or more bank accounts, or a list of transactions in an account.
Most Kiwi PocketSmith users hold accounts at two or more banks, with around five accounts per bank. So the banks could have made between 12 and 40 cents, every time a regular New Zealand PocketSmith customer retrieved up-to-date data for their accounts — even if there wasn’t any new data.
Banks would charge these fees to the companies, like PocketSmith, that gave consumers access to their data. These fees would then need to be passed directly on to the consumer; only in the very rarest of circumstances would these costs be able to be absorbed by a fintech (that is, if the fintech in question made money from selling your data, which is definitively not PocketSmith).
With that background, let’s discuss why this change is good news for New Zealand.
Australia, the UK and Europe implemented open banking years ago now. Canada is working on their own legislation right now. The New Zealand government falling in line and legislating free access to open banking means that we are on a level playing field with the rest of the world when it comes to financial inclusiveness and consumer data rights.
Allowing banks to charge for access to open banking data would impede New Zealanders’ access to good financial information. This would then put us on the back foot economically, internationally. New Zealand is already a unique economy, being a first world country that is extremely geographically remote from the majority of the world.
If a nation’s people aren’t able to easily obtain access to their own financial data and the financial literacy that this data enables, then it will lead to worse economic outputs for that nation.
Free access to open banking data helps level the playing field for New Zealand and its economy.
A fee-free approach to open banking ensures that the future is bright for access to tools that help New Zealanders do more with their money. At a time when cost of living is putting pressure on households, open banking should be part of the solution: giving people better insights, tools and control over their money. Free access to open banking data drastically increases financial inclusiveness.
Pay-to-play data access would mean only some folks could afford to use tools that access this data. Those that couldn’t afford the fees would have to make do without, or may end up using services that earn revenue through selling data or earn kick-backs from selling financial products to those consumers.
While PocketSmith is a very comprehensive, in-depth personal finance tool made for home CFOs, free access to open banking data means that simpler tools, such as those provided by the Retirement Commission on sorted.org.nz, could consider bringing your banking data into their tools, helping people even more — for free.
The chance of this happening, if banks were charging for every piece of data, would be near-zero.
Overseas, we can freely build, innovate, and compete on a level playing field because there are no artificial barriers to participation. The assurance of free open banking data in New Zealand means we’re operating on the same level playing field locally as we are internationally.
This change encourages more financial innovation. Small Kiwi fintechs can compete, experiment and create products that genuinely improve financial wellbeing for New Zealanders. Many New Zealand software startups test the waters in New Zealand before entering overseas markets — and so lowering the barrier to entry for fintechs means that we’re far more likely to see local fintech innovation going to the world stage.
This all means more financial innovation in New Zealand, more weightless exporting of software overseas, and a more vibrant financial economy. This will all lead to better economic outcomes for our country.
This change means that banks will focus on efficiency in delivering their APIs. With a pay-to-play structure, they would have been incentivised to increase the number of API requests that are required to perform a specific task, as they’re earning 1 cent per request.
I’d like to illustrate this with some slightly nerdy details about the API spec. The account listing API does not include balance information. Instead, balances are obtained via a totally separate request. Allowing the fetching of all account balances at once is not mandatory, but instead of only implemented at the discretion of the bank themselves.
This means that if you had five accounts at a bank, it could cost up to 6 cents to get a list of account names and balances for those accounts; 1 cent for the account listing to get account names, and 5 cents to get the balance for each account separately.
The optional endpoint for providing all account balances at once is now far more attractive to a bank looking to save costs, than a bank trying to earn money through individual API requests. Not charging for API access means that the banks will focus on efficiency instead of revenue, resulting in a faster, more consumer-friendly API.
New Zealand PocketSmith customers have a real home-team advantage: PocketSmith is cheaper in New Zealand than anywhere else in the world when you take currency into account. And because open banking data access is going to be free, it’ll stay that way too.
Now that things are looking bright again for open banking legislation in New Zealand, our Kiwi customers can look forward to having legitimate, regulated open banking data being brought into PocketSmith — without the spectre of what financial burden getting access to that data would impose.
All in all, this change means we can all be excited about open banking in New Zealand again. Jason and I started PocketSmith in 2008, and we’ve been waiting for open banking to hit our shores since we first saw the Open Bank Project launch in Germany 2010.
It’s now been made clear to the world, and to all Kiwis, that New Zealand is serious about building an open, trusted, and consumer-first financial future.
And if this decision hurts the bottom line of the banks who are making records profits, while their customers suffer through a cost-of-living crisis… well, I don’t think that’s something that any of us should lose sleep over.
James is the CTO and co-founder at PocketSmith. He loves tech from software to hardware to music, and is passionate about technology being a net-positive in people’s lives. He lives off-grid with three humans, one axolotl, one dog, and too many possums.
