What Is POLi?
POLi is a technology developed by Australia Post.
It is an online payments option you can use for online shopping that allows you pay the merchant instantly via your internet banking.
The benefit of POLi is you do not need to wait 1-2 business days for the internet banking payment to clear. Because you log in to your internet banking via the POLi portal, it confirms the payment instantly with the merchant, meaning they can start to send/deliver your purchase immediately.
How Does POLi Work?
Whenever you want to make a purchase online, select the POLi payment option.
For example, here is the POLi screen for an order on EasyCrypto:
Select your bank and you will be asked to log in to your internet banking.
Then you will follow the prompts to make an internet banking transfer to the merchant.
Complete the payment and your order will finalise. A receipt will be sent to you.
That's it - your payment is complete.
Costs Involved With POLi
One the reasons POLi has become more popular is because it doesn't require any fees.
This is why bank transfer used to be a popular option for payments within online shopping, but the issue was the payments would take too long to clear.
People didn't want to wait 2-3 days before their orders were confirmed.
POLi gives you the advantage of paying by free bank transfer, but with instant confirmation.
Is POLi Safe?
Of course, POLi endorses their product fully when it comes to safety, saying the technology stores no sensitive data, and that there have been zero safety breaches since the product was launched.
However, several of NZ banks feel differently.
Kiwibank has also publicly stated the it does not endorse customers using POLi.
ANZ also explicitly advises customers against using POLi.
The reason for this is quite obvious once you actually use POLi for the first time.
You are required to enter your internet banking username and password within the POLi platform, which is obviously against best practices.
Banks are very clear that you should NEVER give your internet banking details to anyone, no matter how trustworthy they may seem.
Some bank have even warned it is against their internet banking terms and conditions to share your internet banking details, meaning you may jeopardise your ability to claim fraud protection or compensation in the event your bank account is compromised.
On the other hand, POLi has publicly said that banks are more than welcome to audit them at any time to confirm that no internet banking usernames or passwords get stored or captured on their servers.
This leaves customers like you and me in an interesting position.
The convenience of POLi is great, but banks say don't use it, and POLi says it safe.
So what do we do?
How To Use POLi (More) Safely
In my personal opinion, I think using POLi isn't necessary.
Simply pay by credit card, and where there is a surcharge, pay by bank transfer.
However, if you want to utilise the convenience of POLi, there are a couple of things you can do to mitigate your risk.
Change your password
After you enter your internet banking details, change your password as soon as the transaction has been made.
This should go a long way to protecting your account.
While POLi could potentially still have your username, at least your password is now secure again.
You should do this after every purchase using POLi.
Have a separate bank account
If you use POLi regularly, consider opening a new bank account just for POLi purchases.
Most NZ banks offer a free checking account, so this shouldn't cost you any extra.
Open a new account at a different bank, so it's completely detached for the rest of your banking. Keep only a limited amount of funds in it, so in the case it does get compromised, you won't lose a lot.
This is much safer than using your regular bank account which is tied to all your savings and investments.
Even though the above may still not appease your bank, it should be enough to use POLi safely with minimal risk.