Janine Starks is the author of www.moneytips.nz and a financial commentator with expertise in banking, personal finance and funds management.

OPINION: What’s on my Christmas banking wish list for 2024? Santa’s sack needs to contain instant payments and lots of fixes for antiquated bank security. I’d also like to see a revamped Ombudsman Service, reimbursement for investment fraud victims and legislation formally setting the liability for fraud onto banks, with controls.

Let’s hope the new Minister of Commerce and Consumer Affairs, Andrew Bayly, has his elf ears pricked up and sorts out our shambles of intentional delay.

The Bankers Association released a fraud progress update this week, with no deadlines, no full schedule of work, the stench of under-resourcing, and a lack of urgency. It’s time to stop letting banks control the pace and method of catch-up.

The brightest star: Instant payments

Instant payments are at the centre of the banking universe almost everywhere except New Zealand. When you use online banking to make a payment, it reaches the recipient instantly. There’s nothing more to it than that.

Cheeks should be bright red at ANZ, ASB, BNZ and Westpac. Even little old Fiji got instant payments a couple of weeks ago. In the Asia Pacific region, only Laos, Papua New Guinea, North Korea and New Zealand don’t have real-time payments. Even more cutting, our banks invested in the system for wholesale and cross border use, but didn’t roll it out for retail customers.

In other countries, if you sell your car, bike or sofa, you can carry out the transaction on the side of the road. You pay with the bank app on your phone, the seller sees the money immediately and off you go.

If there’s one little bit of lingo to learn, it’s the word “finality”. Instant payments are final. And no, that doesn’t make the system less safe. Before you pay, the account name is matched, making an instant payment far safer than our current system. Security is not sacrificed via speed. Far more data can be transmitted, improving security.

But the big boon with instant payments is that they are a massive disruptor to the Visa/Mastercard system.

We can’t pay for a coffee direct from our account to a cafe’s bank account, because finality doesn’t happen for 30 minutes to several hours. Visa and Mastercard give retailers that all-important finality immediately, but the payment is routed via their system and comes with hefty fees for shops.

Once New Zealand’s payment platform is instant, all sorts of technology companies can enter and provide cheaper methods. The stranglehold on finality will be over. If you want to see an example, look up Monoova, a payments provider being used by the Australian airline Bonza (not to be confused with the likes of Poli, which banks do not support).

The commercial incentive for delay is loud and clear; the fee-flow from Visa and Mastercard. When you look at the speed and actions of banks, it’s nothing short of giving the Commerce Commission the bird.

Banks have spent 2023 in red-herring mode

From fishy stories about needing to put safety before speed of payments, to trying to convince us 30-minute to three-hour processing times are quick, banks have been muddying the water about blocking competition. Even the promotion of “open-banking” in 2024 fails to tell us instant payments are crucial to a thriving ecosystem, and we have no idea when they’ll deliver it.

The Christmas wish-list continues…

Rudolph’s favourite: “Confirmation of Payee”. New Zealand banks don’t confirm the account name and number match and, to this day, they still don’t provide a warning on the payment screen for this. That’s indefensible. It’s the number one enabler of fake term deposit fraud, invoice fraud and “Hey Mum” emergency message fraud.

Dasher’s delight: We need to see the Banking Ombudsman uphold the fake investment scheme cases. Banks have under-funded security and left the payments system unfit for purpose, unsafe and a target for criminals. Duty of skill and care has failed with first time payments, along with friction, staff training and profiling of inward payments to spot money mules.

Dancer’s decision: The Contingent Repayment Model. We need a formal system where fraud victims are repaid, as long as a customer didn’t ignore warnings or over-ride the name-check.

Prancer’s passkeys: In short, passwords have to go and passkeys come in for all banks. Check out Air New Zealand’s option of a passkey login (you use your face, fingerprint or device pin rather than pets and mums’ names).

Cupid’s codes: The banning of text messages containing a bank code to set up Apple Pay, Google Pay or password reset. These functions open up the full balance of an account to a fraudster.

Blitzen’s break-away: The Banking Ombudsman Service needs restructuring. Being a bank-owned company with banks on the board is not conducive to independence or good governance. An independent chair and consumer rep fools no one. While banks can determine their own practices, forcing the Ombudsman to consult over what determines good practice makes their fingers far too sticky.