Digital payments have won the argument. They have not yet won the trust. Payments NZ’s Consumer Research 2026 shows 25 percent of New Zealanders now prefer paying by smartphone for everyday purchases, up from 15 percent in 2024, while cash preference sits flat at 11 percent. The same survey of 1,000 people finds 76 percent are concerned about fraud and scams when paying, and 55 percent rank safety as the top factor when weighing up a new payment method.
That gap between adoption and confidence is not a soft, feel-good metric. It is a cost line. Every lost transaction, every reimbursed victim and every compliance project to plug the leaks gets priced into the system that merchants, banks and customers all fund.
Two reasons customers are walking away from the tap
The sharper finding is what is actually changing behaviour. Some 40 percent have changed how they pay to avoid fees or surcharges, against 29 percent who changed because of fraud risk, and surcharges have now overtaken security as the main reason people avoid contactless. Nearly half of respondents report at least one sign of financial stress. Payments NZ chief executive Steve Wiggins put it plainly: “Innovation matters, but outcomes matter more.”
For retailers this is a two-front problem. A customer who fears the terminal or resents the fee is a customer who hesitates, switches method or leaves. Across a market that processed $9.1 billion over 166 million card transactions in June alone, small shifts in payment mix carry real money.
The $265 million bill
The fraud cost is not hypothetical. In 2025, Payments NZ’s first Reported Fraud Monitor, drawing on 12 banks, found New Zealanders lost $265 million to fraud in the 12 months to November. Of that, $126 million came from authorised payments, where victims were tricked into approving transfers themselves, and $139 million from unauthorised transactions. Compromised credentials alone accounted for $84 million.
The exposure is concentrated exactly where growth is. Experian research in April found 43 percent of New Zealanders say they have been victims of online fraud, with reports highest in banking (71 percent), e-commerce (64 percent) and retail (46 percent). Victimisation skews older, with 56 percent of Gen X affected, while younger cohorts lead smartphone adoption. Businesses chasing frictionless checkout are building on the same ground scammers are mining.
The industry fix runs to 2030
Card networks are betting on engineering their way out. Mastercard’s New Zealand country manager Megan Simons says stolen card numbers cost Kiwis $84 million in a year, and the company is rolling out numberless cards, one-time card numbers and wider click-to-pay through to 2030. “What we as an industry need to do is make sure that people understand what’s coming and that these things are actually safer than the older way of doing things,” she said.
That is the right direction, but the timeline is the problem. A five-year rollout means the trust gap persists through at least one more economic cycle.
Payments NZ’s general manager of strategy, Chad Haighmark, argues that as payments become more embedded and invisible, trust matters more, not less. Payments “underpin economic confidence,” he wrote in May. “If trust is eroded, the impact is immediate and far-reaching.”
The Reserve Bank’s payments modernisation work points to the system-level tools, confirmation of payee and better shared monitoring, that the UK and Australia have used to cut scam losses. New Zealand has been slow precisely because no single incumbent captures the benefit. That is a coordination failure, and one where a firm industry deadline would serve business better than another round of consultation.
Not a crisis, a tax
It would be wrong to call this spiralling. The National Cyber Security Centre’s 2026 tracker found the share of people suffering a detrimental cyber impact in the previous six months fell from 36 percent to 27 percent. And consumers are not anti-technology: 49 percent are comfortable with AI being used to detect fraud.
That is the opening. Customers will accept new tools if the safeguards are visible and the fees are fair. Fraud is less an emergency than a standing tax on digital commerce, paid in reimbursements, abandoned carts and surcharges that push people back toward slower methods.
The businesses that win the next phase will not be the ones with the newest checkout. They will be the ones that make paying feel safe and cheap at the same time. Until banks and networks deliver confirmation of payee and the 2030 card changes land, every merchant should treat trust as part of the price, because their customers already are.
Sources
- RNZ: Consumers embrace digital payments but safety and affordability remain top concerns (2026-10-06)
- Stats NZ: Electronic card transactions June 2026 (2026-07-15)
- eCommerceNews: New Zealanders fear online fraud & AI-driven scams (2026-04-10)
- RNZ: Mastercard plans changes to way we use credit cards (2026-06-04)
- eCommerceNews: At the crossroads, building the next phase of payments in Aotearoa (2026-05-27)
- Reserve Bank of New Zealand: Modernising New Zealand’s Retail Payment System
Join the discussion
Add useful context, ask a good question, or challenge an idea — keep it specific and respectful.