Australian retailers back banks in Apple Pay fight

Australian retailers back banks in Apple Pay fight

Australia's retailers have thrown their weight behind an effort by the country's banks to win the right to collective bargaining with Apple over NFC access to iPhones.

The banks - Commonwealth Bank of Australia, Westpac Banking Corporation, National Australia Bank, and Bendigo and Adelaide Bank - are seeking permission from Australian Competition and Consumer Commission (ACCC) to engage in collective negotiation and boycott activities with Apple in relation to the Apple Pay platform and with other third party wallet providers.

By working together, the banks hope to exert pressure on Apple and win access to the iPhone NFC antenna for their own contactless payments apps, as they already have with Android devices.

Apple in return has accused the banks of exhibiting cartel-like behaviour, stifling competition and creating undue security risks.

Having denied the banks interim authorisation, the ACCC is now not expected to make a formal decision on the matter until October but in the meantime has published submissions from various interested parties.

The Australian Retailers Association has backed the banks, saying that new mobile payments services are unlikely to succeed if they are not available on iOS devices, adding: "In our view, for as long as Apple Pay remains the only app that can use the iPhone’s NFC functionality, the potential for innovation in mobile wallets and mobile payments will be limited."

Coles, a retail giant which claims to serve 20 million customers every week, is also backing the banks, arguing that "it is important to recognise that the industry has collectively made very significant investments in payments technologies like NFC, with an open and inclusive approach aimed at continually improving the experience of all customers".

Apple's submission "strongly urges" the Commission to reject the banks' application, arguing that it will "lead to less competition and less innovation" and that "these banks want to maintain complete control over their customers".

The aim of the banks is to "force Apple and other third party providers to accept their terms, allow them to charge consumers that choose to use Apple Pay, and force Apple to undermine the security of its mobile payment service by opening access to the NFC antenna".

However, in its submission, the Australian Payments Clearing Association argues that Apple's security concerns are misguided and that a common set of standards for NFC payments will "provide net public benefits to all parties in the mobile payments ecosystem by maximising efficiencies that flow from a single set of negotiations over security matters and by enabling the extension of those security standards and requirements to all mobile payment facilities and transactions".

Comments: (1)

A Finextra member
A Finextra member 23 August, 2016, 17:571 like 1 like

So, this is not going well for Apple. But I wonder if there's another reason for this and that's to with the fact that iPhones have a particulary poor implementation of the NFC controller. There's evidence to show that Apple have added a booster to the chip and to give access to this may mean exposing some additional code that Apple have used to control it. 

I do hope they lose, seriously hope they do and then other banks have the balls to take on Apple and force them to open the device to their own payment products.