27 June 2017
visit www.finastra.com

Australian banks fight back over Apple Pay 'fantasy' claims

13 February 2017  |  7626 views  |  3 Apple iPhone

The group of Australian banks fighting it out with Apple over the introduction of the consumer electronics giant's mobile payment system have narrowed down their complaint to the Australian Competition and Consumer Commission (ACCC) to focus solely on open access to the NFC function on iPhones.

The five banks - Commonwealth Bank of Australia, Westpac Banking Corporation, National Australia Bank, and Bendigo and Adelaide Bank - were initially seeking permission from the competition watchdog to engage in collective negotiation with Apple in relation to the roll out of Apple Pay in Australia.

In December, the Commission issued its provisional ruling, coming down in support of Apple and expressing concerns that a ruling in favour of the banks could reduce or distort competition in a number of markets.

In their latest submission, the banks have sought to address the ACCC's concerns by removing collective negotiation on the potential to pass-through the additional fees Apple wishes to impose on the payment system, and limiting the authorisation term to 18 months - half the original term sought.

The response comes just a week after Apple accused the banks of wanting to price Apple Pay out of the market and at the same time condition consumers to accept a fee-based model for tap-and-pay transactions for their own mobile wallets.

Speaking on behalf of the banking collective, Lance Blockley has dismissed Apple's carping as pure fantasy.

“This application has always been about consumer choice, and allowing competition between the makers of mobile wallets to offer the best products and features they can to determine which mobile wallet consumers will use," he says. "The applicants want to put up their digital offerings head to head with Apple Pay, and let the market and individual consumers decide which best suits their needs."

Unlike Apple, Google's Android operating system allows any installed application to access the open NFC function, he points out.

“Apple is not a bank or a credit card scheme, and Apple cannot on their own complete a mobile payment, Blockley continues. "Nor are the applicants manufacturers of mobile phones - both parties need each other to bring strong mobile payment offerings to the market.”

The banks' arguments have been supported by the 5000 members-strong Australian Retailers Association. In a separate submission to the regulator, they say: “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."

The ACCC is expected to issue its final ruling on the dispute in March.

Comments: (3)

Brett King
Brett King - Moven - New York | 13 February, 2017, 20:33

The fact is that had Australian banks not waited until Apple had launched this to suddenly have their "come to Jesus" moment on mobile payments, they could have invested in their own NFC-based capabilities. But that's not what they did, so instead they have to rely on a rear-guard action against Apple. This is just another example of banks having a failure of imagination and then trying to get regulatory support for a strong platform coming in and providing solid competition for customers

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Patrick Fitzgerald
Patrick Fitzgerald - EY - Geneva | 14 February, 2017, 07:23

I'm not very close to the details, but I was under the impression that australian banks had in fact done exactly what Brett King suggests they should have done, see eg: https://www.cnet.com/news/commonwealth-bank-app-launches-nfc-payments/ (2013).

 

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Arjeh Van Oijen
Arjeh Van Oijen - IBM GBS - Amsterdam | 14 February, 2017, 10:12

the complaint is here that Apple shields off the NFC device on the iPhone to be connected to no other apps than their own wallet. The fact that banks did not launch an alternative NFC app/wallet for the iPhone was not they did not wanted to, but that it was/is technically impossible without Apple opening access to the NFC device.

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Apple fears Australian banks will price it out of the market

Apple fears Australian banks will price it out of the market

06 February 2017  |  5187 views  |  0 comments | 7 tweets | 4 linkedin
Australian watchdog comes down on side of Apple in bitter bank dispute

Australian watchdog comes down on side of Apple in bitter bank dispute

29 November 2016  |  5785 views  |  0 comments | 9 tweets | 11 linkedin
Apple Pay's Australian travails eased by Cuscal deal

Apple Pay's Australian travails eased by Cuscal deal

10 November 2016  |  4265 views  |  1 comments | 3 tweets | 6 linkedin
Australian banks pull no punches in acrimonious Apple Pay dispute

Australian banks pull no punches in acrimonious Apple Pay dispute

17 October 2016  |  7283 views  |  0 comments | 12 tweets | 12 linkedin
Oz banks step up Apple Pay row

Oz banks step up Apple Pay row

30 August 2016  |  6268 views  |  1 comments | 14 tweets | 5 linkedin
Australian retailers back banks in Apple Pay fight

Australian retailers back banks in Apple Pay fight

23 August 2016  |  6915 views  |  1 comments | 14 tweets | 12 linkedin
Apple claims early victory in skirmish with Australian banks

Apple claims early victory in skirmish with Australian banks

19 August 2016  |  5909 views  |  0 comments | 9 tweets | 7 linkedin
Apple hits back at Australian bank 'cartel' in Apple Pay fight

Apple hits back at Australian bank 'cartel' in Apple Pay fight

10 August 2016  |  6387 views  |  6 comments | 10 tweets | 3 linkedin
Fintech founder calls Aussie banks hyprocrites over Apple Pay complaints

Fintech founder calls Aussie banks hyprocrites over Apple Pay complaints

29 July 2016  |  8657 views  |  2 comments | 14 tweets | 9 linkedin
Aussie banks team up for Apple Pay legal challenge

Aussie banks team up for Apple Pay legal challenge

27 July 2016  |  9005 views  |  1 comments | 16 tweets | 15 linkedin

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.finastra.comvisit wavestone-advisors.co.ukvisit vasco.com/news/PSD2-compliant-solutions

Top topics

Most viewed Most shared
Live: EBAday 2017, day twoLive: EBAday 2017, day two
10893 views comments | 4 tweets | 5 linkedin
ECB preps eurozone-wide instant payments serviceECB preps eurozone-wide instant payments s...
8650 views comments | 19 tweets | 33 linkedin
hands typing furiouslyArtificial Intelligence- Computer to IOT
7997 views 0 | 4 tweets | 2 linkedin
ABN Amro tests wearable tech for contactless paymentsABN Amro tests wearable tech for contactle...
7804 views comments | 9 tweets | 6 linkedin

Featured job

Six Figure Base + Commission + Stock Options
London

Find your next job