The banks - Commonwealth Bank of Australia, Westpac Banking Corporation, National Australia Bank, and Bendigo and Adelaide Bank - were seeking permission from the Australian Competition and Consumer Commission (ACCC) to engage in collective negotiation and boycott activities with Apple in relation to the roll out of Apple Pay in Australia.

ACCC chairman Rod Sims says: “This is currently a finely balanced decision. The ACC is not currently satisfied that the likely benefits from the proposed conduct outweigh the likely detriments. While the ACCC accepts that the opportunity for the banks to collectively negotiate and boycott would place them in a better bargaining position with Apple, the benefits are currently uncertain and may be limited"

The banks are continuing to press their case, saying that they intend to provide additional supporting arguments in favour of authorisation ahead of the watchdog's final decision in March.

Bank spokesman Lance Blockley says: “If the draft determination of the Australian competition regulator stands, effectively there will be no competition against Apple for mobile payments on the iPhone."

In its ruling, the ACC points out that banks can already offer competing digital wallets on iPhones without direct access to NFC, through their own apps using Apple Pay, or using NFC tags. The regulator expresses concerns that a ruling in favour of the banks could reduce or distort competition in a number of markets.

Says Simms: “Apple Wallet and other non-bank digital wallets could represent a disruptive technology that may increase competition between the banks by making it easier for consumers to switch between card providers and limiting any ‘lock in’ effect bank digital wallets may cause."

“The application has never been about preventing Apple Pay from coming to Australia or reducing competition between wallets. It has always been about providing consumer choice and innovation," Blockley counters. “Whilst we are disappointed with this draft result, our application is not just relevant to Australia - the same issues around consumer choice and the freedom to offer genuine competition against Apple Pay arise globally.”