Banks will begin rolling out the new Same-day Cleared Payment (SDCP) system over the next few months.
Under the system, built by the New Zealand Bankers Association, customers of participating banks will be able to instruct them to make a payment within the same business day to other banks in the scheme. These include ANZ, ASB Bank, Countrywide, Bank of New Zealand, Citibank, HongkongBank, National Bank of New Zealand, TSB Bank and WestpacTrust.
Bankers' Association spokesman Keith Fox says members have been testing the system and all banks are likely to be operational by early next year. He says banks will build other functions around the service to differentiate themselves and fees will vary from bank to bank.
Businesses and the banks themselves are expected to be the primary users, although some personal transactions will be suited.
"An example that's often cited is property settlements where people want payment to go through as soon as possible."
Fox says the banks have been able to re-use existing infrastructure to provide the new service.
The system was bought from Brussels-based SWIFT (The Society for Worldwide Interbank Financial Telecommunications).
The Bankers' Association already uses a SWIFT system and network to securely move payments across international borders in real time.
"SWIFT built a function supporting domestic payments which we bought to build the SDCP system," says Fox. "All transactions will be transferred across the existing network and the banks don't have to build new interfaces."
SDCP also uses the same hardware bought for the recently implemented Real Time Gross Settlement (RTGS) system, the running of which is outsourced to Datacom. RTGS requires the settlement of transfers between banks at the Reserve Bank to take place on a payment-by-payment basis rather than, as was previously the case, once a day on a net aggregated basis.
Before RTGS, if a bank could not meet its payment obligations at the end of a trading day, all payments could theoretically be reversed.
Fox says the adoption of RTGS has been a global trend since the share market crash of the '80s.