by 
Most people assume that if an app holds their money, someone official is keeping an eye on it. That assumption is doing a lot of heavy lifting — and in New Zealand and Australia, it doesn’t always hold.
The rise of neobanks, buy-now-pay-later (BNPL) platforms, and multi-wallet payment apps has outpaced the rulebooks that were written for an era of branch banking. The regulatory frameworks in both countries are patchwork affairs: robust in places, conspicuously thin in others. For young professionals juggling Afterpay, a Wise account, direct debits, and a digital-only bank, understanding who’s actually responsible for your money matters more than most people realise.
The basic architecture: who’s in charge of what
In Australia, banking regulation sits primarily with three bodies — and which one governs your fintech depends heavily on what that fintech actually does.
- Australian Prudential Regulation Authority (APRA) — licences and supervises authorised deposit-taking institutions (ADIs), including full banks and some neobanks
- Australian Securities and Investments Commission (ASIC) — oversees financial products, credit, and market conduct, including many BNPL providers
- Australian Competition and Consumer Commission (ACCC) — handles competition law and consumer protection in payments markets
In New Zealand, the picture is structurally simpler — but that simplicity masks some real gaps.
- Reserve Bank of New Zealand (RBNZ) — registers banks and sets prudential standards
- Financial Markets Authority (FMA) — regulates financial advice, managed funds, and some payment services under the *Financial Markets Conduct Act 2013*
- Commerce Commission — competition and fair trading
Here’s the thing: neither country has a single, unified digital banking regulator. What you get instead is regulatory coverage that depends on the specific product — not the company offering it.
The deposit protection gap that most users don’t know about
Australia has deposit protection. Under the Financial Claims Scheme, deposits up to AUD $250,000 per person per ADI are guaranteed by the federal government. That includes neobanks like Up and Ubank, which hold full APRA licences.
New Zealand has no equivalent scheme. The RBNZ has been working toward a deposit compensation scheme for years — and in 2023, legislation finally passed to establish one, with a cap of NZD $100,000 per depositor per institution. But as of 2024, the scheme was still being implemented, leaving a window of vulnerability that most Kiwi users simply aren’t aware of.
“New Zealand is one of the few developed countries that has not had a deposit insurance scheme. The new scheme will help ensure New Zealanders can have confidence in the banking system.”
— Adrian Orr, Governor, Reserve Bank of New Zealand, RBNZ, March 2023
Where BNPL and payment apps fall — and fall through
BNPL is where things get genuinely complicated. Until recently, products like Afterpay operated almost entirely outside consumer credit law in Australia because they technically don’t charge interest. According to ASIC, BNPL use grew to 7 million active accounts in Australia in FY2021-22 — a significant chunk of the adult population using a product with, until 2024, no mandatory affordability checks.
Australia moved to bring BNPL under the *National Consumer Credit Protection Act* in 2024, requiring providers to hold an Australian Credit Licence. New Zealand has not made the same move, meaning Kiwi BNPL users still have weaker formal protections than their Australian counterparts.
A quick comparison of where each country stands
| Product type | Australia | New Zealand |
|---|---|---|
| Licensed neobanks | Full APRA licence required; deposit protection up to AUD $250,000 | RBNZ registration required; deposit scheme being implemented (NZD $100,000 cap) |
| BNPL providers | Under credit law from 2024; ASIC-licenced | No dedicated BNPL regulation; limited FMA oversight |
| Payment apps (e.g. Wise, PayPal) | ASIC oversight; stored value rules apply | Partial FMA oversight; gaps remain for stored value |
| Crypto-adjacent apps | Regulatory review ongoing; AUSTRAC AML rules apply | FMA licensing for crypto exchanges; still evolving |
Six things you should actually check before using a digital finance app
Regulatory complexity aside, the practical question is: what can you do right now? Here’s what I’d verify before trusting an app with meaningful amounts of money.
- Check for an ADI licence (Australia) — Search the APRA register. If an Australian app isn’t on it, your funds aren’t protected by the Financial Claims Scheme.
- Check RBNZ’s register (New Zealand) — The RBNZ publishes a register of registered banks. Non-bank lenders are listed separately — and have a different, weaker set of obligations.
- Read the “how your money is held” section — Legitimate apps explain this clearly. If an app buries or avoids explaining where your funds sit, treat that as a red flag.
- Understand your BNPL terms before you tap — Even with Australia’s new credit laws, affordability checks vary. In NZ, the onus is almost entirely on you.
- Don’t assume “bank” in the name means it’s a bank — Several apps use bank-adjacent branding without holding a full banking licence. Which, strictly speaking, isn’t how most people interpret the word.
- Check AUSTRAC or DIA registration for payment apps — In Australia, payment platforms must register with AUSTRAC for anti-money-laundering purposes. In NZ, the equivalent is the Department of Internal Affairs (DIA). Registration doesn’t equal prudential oversight, but its absence is a meaningful warning.
What does “registered bank” actually mean?
Registered bank: In New Zealand, a financial institution that has been granted registration by the Reserve Bank of New Zealand under the *Deposit Takers Act 2023*, confirming it meets minimum capital and governance standards. Registration does not automatically mean your deposits are government-guaranteed — that requires separate deposit protection scheme coverage.
The honest takeaway
The honest answer is that regulation in both countries is catching up — but unevenly, and not always fast enough for how quickly people are adopting these products. Australia has stronger frameworks overall, particularly post-2024 for BNPL. New Zealand is improving, but still has material gaps, especially for non-bank lenders and stored-value payment apps.
According to the RBNZ, approximately 93% of bank deposits in New Zealand will be fully covered once the new deposit scheme is fully operational — a meaningful improvement, but the implementation timeline matters enormously if something were to go wrong in the interim.
Use these apps. They’re genuinely useful. But know what kind of protection — if any — is sitting behind them.
Frequently asked questions
Q: Are neobanks in Australia as safe as traditional banks?
A: Yes, if they hold a full APRA licence as an authorised deposit-taking institution. Apps like Up and Ubank are APRA-licenced, meaning deposits up to AUD $250,000 are protected under the Financial Claims Scheme. Always verify on the APRA register before depositing significant funds.
Q: Does New Zealand have deposit insurance?
A: New Zealand passed legislation in 2023 to establish a deposit compensation scheme capped at NZD $100,000 per depositor per institution under the *Deposit Takers Act 2023*. As of 2024, the scheme was still being implemented — so protection is not yet fully in effect for all depositors.
Q: Is Afterpay regulated in Australia?
A: As of 2024, yes. Australian legislation brought BNPL providers including Afterpay under the *National Consumer Credit Protection Act*, requiring them to hold an Australian Credit Licence and conduct basic affordability assessments. This was a significant change from the previous unregulated model.
Q: What happens to my money if a payment app (not a bank) goes bust in New Zealand?
A: It depends on how the app holds your funds. If they’re held in a trust account segregated from the company’s own assets, you stand a better chance of recovery. If not, you’d likely be treated as an unsecured creditor — which is a polite way of saying you’d be near the back of a very long queue. Always read the product disclosure statement.