Page last updated: 12 February 2025

e-money and payment service providers

E-money is a digital cash equivalent where value is held electronically, for example on a prepaid card. In some jurisdictions, providers of e-money services require a licence (and “e-money” and “e-money institution” have specific regulatory definitions). This is not the case in New Zealand, however, some regulations will still apply. Payment service providers are businesses that participate in the electronic payment system by facilitating payments for goods and services.

Licensing and registration

There is no specific licence for e-money institutions or payments service providers in New Zealand.

Instead, providers will have a range of obligations under New Zealand’s financial services regulatory regime, including the Financial Markets Conduct Act 2013 (FMC Act) and, potentially, the Non-bank Deposit Takers Act 2013 (NBDT Act), which is overseen by the Reserve Bank of New Zealand.

The level of regulation will largely depend on whether providers are issuing debt securities as part of their service offering. This would be the case if, in connection with the e-money or payments service, providers accept customer deposits or other repayable funds (other than on trust). Read about the NBDT regime on the Reserve Bank’s website. and about issuing debt securities in New Zealand on our website.

If customer funds are genuinely held on trust (this will generally be evidenced by funds being held in a separate trust account and maintained with a registered bank) this will not, of itself, be a debt security. This is because funds held on trust are not “deposited with, lent to, or otherwise owing by” the service provider, as required by the definition of “debt security” in the FMC Act. You should seek legal advice if you are unsure whether your payments service may involve issuing a debt security (as this will have regulatory consequences under the FMC Act and, potentially, require a licence from the Reserve Bank under the NBDT Act).

Obligations

Providers who do not issue debt securities will still have regulatory obligations. For example:

The fair dealing provisions in Part 2 of the FMC Act will apply. These are broad principles that prohibit (among other things) misleading or deceptive conduct and the making of false, misleading or unsubstantiated representations in relation to the supply of financial services.