New Zealand’s Council of Financial Regulators (CoFR) is seeking industry feedback on a proposal to introduce a basic transaction account option for its banks.

The consultation follows the release of an Issues Paper by the CoFR into the adoption of basic accounts – a simplified transaction account designed to improve equitable access to banking services for vulnerable or otherwise excluded communities – by New Zealand’s banks.

A previous market study report into personal banking services by NZ’s Commerce Commission called for a collaborative approach to developing and rolling out basic banking accounts.

Basic transaction accounts differ from traditional banking accounts due to their additional controls (such as transaction caps), limiting their ability to be used for money laundering and terrorism financing, the CoFR notes.

These additional controls make basic transaction accounts a low-risk product, thereby supporting simplified and streamlined customer onboarding.

The consultation will seek to determine industry’s views on some of the core features of a basic transaction account, as well as setting out parameters for who should qualify for access to these accounts, and key capabilities required by deposit-taking institutions to offer and maintain these accounts.

Westpac New Zealand recently launched a pilot of its own basic transaction account, designed for individuals who currently struggle to meet legal identification requirements.

“Having a transaction account means people can safely receive, store, spend and save money. Transaction accounts are a vital foundation for people to take part in the modern economy,” said Reserve Bank of New Zealand (RBNZ) Governor Christian Hawkesby.

He added: “We see the benefits that basic transaction accounts could have for some New Zealanders and broader society, particularly for customers who may be in challenging circumstances and struggle to meet traditional onboarding requirements, such as providing ID.”

FMA chief executive Samantha Barrass noted that in overseas jurisdictions, including the UK, basic transaction accounts can serve as “a lifeline for people to receive an income or make payments”.

These overseas examples were highlighted in the Issues Paper.

“[We] want to see them available here,” she said.

The CoFR comprises the Reserve Bank of New Zealand, the Financial Markets Authority, the Commerce Commission, the Treasury and the Ministry of Business, Innovation and Employment.

The consultation will be run over the next eight weeks, closing to submissions on 18 June 2025.