Businesses that want to start accepting online payments need a way to collect money from customers through a website, application (app), or checkout page. A payment provider can handle the connection between the business's checkout and the customer's bank or card issuer. But businesses still need to think through a payment strategy; online payments in New Zealand (NZ) carry specific considerations. These include a card market dominated by Visa and Mastercard, and customers that expect the ability to pay with traditional cards and newer methods such as digital wallets. New Zealand businesses also need to be familiar with goods and services tax (GST) rules for cross-border sales.
Below, we'll discuss how to accept payments online in New Zealand, including some popular payment methods to consider offering and what to look for when choosing a payment provider.
Key takeaways
Due to the country's small domestic market, many online businesses in New Zealand seek cross-border sales, which means they have to manage goods and services tax (GST) registration and currency conversion.
Cards are most commonly used at checkout, but digital wallets and account-to-account (A2A) bank payments are increasingly popular – especially with younger customers.
When considering which payment provider to choose, important factors include checkout experience, fraud handling, settlement speed, and support for growth into new markets.
Why is it important to accept online payments in New Zealand?
New Zealand's growing e-commerce market is expected to reach NZ$17.6 billion New Zealand dollars (NZD) by 2028. With online payments, businesses in New Zealand can reach domestic and international customers around the clock and manage most transactions quickly and securely. Online payments can also increase sales, improve the customer's experience, and help businesses stay competitive in the digital economy.
How do online payments work in New Zealand?
An online payment starts with a customer entering their payment information, often by typing in their card details or using Tap to Pay on a smartphone. The payment provider then encrypts that data and converts it into a token, which gets routed through the relevant card network (e.g., Visa, Mastercard) to the customer's issuing bank. Major New Zealand issuers include ANZ, ASB, Bank of New Zealand, Kiwibank, and Westpac.
After reviewing factors such as the transaction size and the customer's purchase history, the bank then approves or declines the payment. If approved, the bank places a temporary hold on the funds. The business then captures the payment, the funds are settled, and the transaction is completed – a process that can take several business days.
Another aspect of online sales is currency conversion. If a business sells in NZD, but a customer's card is issued overseas, conversion happens either at the card network level or through the payment provider, depending on how checkout is configured.
While New Zealand doesn't require online fraud or chargeback protection such as 3D Secure, businesses might want to consider strategies to decrease their exposure to risk.
What are common online payment methods in New Zealand?
Card payments are the most common way to pay online in New Zealand, but some additional options are gaining popularity. Here's what the online payment landscape looks like right now.
Cards: Debit and credit cards remain the default for online checkout. Visa and Mastercard are the most accepted card networks across New Zealand and offer fraud safeguards that benefit both businesses and customers.
Digital wallets: Wallet-based checkout – where a customer's card details are stored in their phone and get confirmed with a fingerprint or face scan – has grown steadily as smartphone adoption has risen. A digital wallet saves the customer from having to type in card information, which can be a tedious, error-prone process.
Bank transfers: In account-to-account (A2A) payments, a customer authorises a transfer straight from their bank account instead of routing it through a card network. This payment method is still emerging in New Zealand. However, Payments NZ, which oversees the country's payments infrastructure, has been developing open banking standards based on application programming interfaces (APIs) to support A2A payment adoption.
Buy now, pay later (BNPL): Instalment-based checkout is popular with younger New Zealand customers because it allows them to spread out their payments. Common providers include Afterpay and Klarna.
What should New Zealand businesses look for in an online payment provider?
Businesses in New Zealand need to look for payment providers that match their priorities for compliance, checkout experience, settlement speed, and support for international transactions. Here's a closer look at features to consider:
Payment Card Industry Data Security Standard (PCI DSS) compliance: Businesses need to confirm a provider's compliance with the PCI DSS before signing up. Handling card data without it can create real liability.
Checkout experience: A checkout page that loads quickly on phones, defaults to NZD, and supports customers' preferred payment methods is likely to lead to more sales than a generic checkout built for a different market.
Settlement speed: It's valuable for a business to know how long it takes for a captured payment to become usable funds in its bank account. Currency conversions for cross-border transactions can affect that timeline.
Multicurrency support: If a business sells internationally, it needs to assess how a provider handles multiple currencies and whether it can localise checkout for different markets without requiring a separate integration for each one.
What challenges come with accepting online payments in New Zealand?
New Zealand businesses that sell online need to manage fraud, failed payments, and cross-border complications. Here are some common challenges to guard against:
Card-not-present (CNP) fraud: Businesses need to be prepared for bad actors trying to use stolen card information. Chargebacks from fraudulent transactions cost both time and money, since disputing one means gathering evidence and waiting on a bank's decision.
Failed payments: There are a number of reasons a customer's payment might not succeed – the card could have expired, the issuing bank might have deemed the transaction high-risk and declined it, or the customer could simply be short on funds. A checkout that immediately prompts the customer to try another payment method can save a sale.
Currency fluctuation: Rates can shift between the time of authorisation and settlement. A business that sells in NZD to a customer who pays with a foreign-issued card has no control over the final exchange rate.
Cross-border goods and services tax (GST): GST obligations differ depending on whether a business is importing or exporting. This adds a compliance step that single-market sellers don't have to think about.
Fulfilment mismatches: Customs delays on international orders can create a gap between when a payment clears and when a customer receives their order. This is a common reason for disputes.
How Stripe Payments can help
Stripe Payments provides a unified, global payments solution that helps any business – from scaling startups to global enterprises – accept payments online, in person and around the world.
Stripe Payments can help you:
Optimise your checkout experience: Create a frictionless customer experience and save engineering time with prebuilt payment user interfaces (UIs), access to 125+ payment methods, and Link, Stripe's consumer network.
Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.
Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalise interactions, reward loyalty and grow revenue.
Improve payment performance: Increase revenue with a range of customisable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorisation rates.
Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% historical uptime and industry-leading reliability.
Learn more about how Stripe Payments can power your online and in-person payments or get started today.
FAQs about accepting online payments in New Zealand
The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accuracy, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent lawyer or accountant licensed to practise in your jurisdiction for advice on your particular situation.