Wallo Pay, a Wellington-based fintech startup, has launched a new open banking payment service aimed at reducing transaction costs for New Zealand merchants and cutting surcharges on contactless card payments. Positioned as a direct alternative to traditional credit and debit card networks, the platform offers a flat 0.6 percent merchant service fee and enters the market at a time of growing public and political scrutiny over card fees. The company argues that high acceptance costs have become embedded in everyday commerce and is seeking to provide a lower-cost, bank-to-bank option that reshapes how payments are processed.
Leveraging Open Banking Infrastructure
Wallo Pay’s system runs on open banking rails, enabling payments to move directly between bank accounts rather than through established card schemes. By limiting the number of intermediaries involved in a transaction, the company says it can materially reduce acceptance costs for businesses. This structural shift alters the underlying economics of payment processing and is central to its competitive positioning.
A key feature of the platform is instant settlement, which contrasts with the delayed clearing or batch processing that can accompany card transactions. Immediate confirmation of funds is designed to eliminate pending payment uncertainty for customers. For merchants, particularly in hospitality and online retail, faster settlement may improve cash flow visibility and operational efficiency.
Market Context and Surcharging Debate
Payment surcharges in New Zealand have become a flashpoint as consumers react to additional fees at the checkout, especially for contactless transactions that can attract charges of up to three percent. Wallo Pay estimates that more than NZ$1 billion is lost each year to card-related fees and surcharges across the economy. The company is framing its service as a market-based response to these costs, rather than relying on regulatory intervention to curb them.
The pricing model centres on transparency and predictability, with a single percentage fee applied to transactions. Wallo Pay maintains that such clarity reduces the need for merchants to add surcharges at the point of sale. The approach is intended to compare favourably with traditional providers that may apply higher or more complex fee structures for card acceptance.
Founding Story and Governance
Wallo Pay was founded by Mithun Pookat, who developed the concept during the early months of the COVID-19 pandemic. After missing a return flight to New Zealand from India in March 2020 as borders closed, he remained overseas for two years and faced redundancy from his previous role. During that period, he drafted extensive app wireframes by hand, laying the groundwork for what would become the company’s core product.
The startup describes itself as lean but says it has established its technical base in Christchurch. It has also assembled an advisory board that includes a former senior director from PayPal, focusing on areas such as risk management and compliance. This governance structure is intended to strengthen credibility as the company competes in a regulated financial services environment.
Growth Plans and Funding Strategy
Wallo Pay is targeting one percent of New Zealand’s NZ$115 billion payments market, a goal that would place it in direct competition with established domestic providers and global card networks. Achieving that share would represent a meaningful foothold in a sector long dominated by entrenched players. Success will likely depend on merchant adoption, consumer trust, and the ease with which the platform integrates into existing checkout and point-of-sale systems.
To support expansion, the company has launched an equity crowdfunding campaign on PledgeMe, inviting New Zealanders to invest in the business. The fundraising effort is positioned as a way to build both capital and community backing. In the near term, Wallo Pay’s progress will be measured by how frequently consumers opt for bank-to-bank payments over cards and how widely merchants embrace the alternative at checkout.
Wallo Pay’s launch underscores the growing momentum behind open banking as a catalyst for competition in payments. By promoting a lower, flat fee structure and instant settlement, the startup is challenging entrenched cost structures that have shaped New Zealand’s retail payment landscape for years. Its long-term impact will depend on whether businesses and consumers are willing to shift established habits in pursuit of lower fees and greater pricing transparency.