Apple Hits Out At Australian Banks For 'Trojan Horse' Argument Over Mobile Payment System Access

Apple has fired the latest salvo in its continuing battle with Australia's banks over the future of mobile payments, accusing the industry of continually trying to obstruct the expansion of Apple Pay into the country (via Bloomberg).

In a submission to the Australian Competition and Consumer Commission (ACCC) published on Monday, Apple said the banks' attempts to delay or even block the expansion of Apple Pay was damaging to consumers and smaller card issuers who could use the system "as a means of securing a digital presence in competition with the big banks".

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In July of last year, Commonwealth Bank, Westpac, National Australia Bank (NAB), and Bendigo and Adelaide Bank sought to enter into group talks with Apple to negotiate access to the NFC hardware in the iPhone so they could offer their own mobile payments services using the iPhone's NFC chip. Apple argued that giving the banks such access would "undermine the security and simplicity" of its system. The ACCC later drafted a ruling that refused to grant the banks permission to negotiate collectively.

In its latest submission to the ACCC, Apple argued that the banks' argument over access to the iPhone's NFC chip was a "Trojan horse" and that their wish to have the ability to charge consumers for using Apple Pay was "logically inconsistent", given that competition from other issuers like ANZ who do not charge for using Apple Pay would prevent them from doing so.

"Perhaps the explanation might be that this is perceived by the applicant banks as a way of introducing and then proliferating a new revenue stream in the digital payments age. It may well be that the applicant banks have taken the view that customers may be more willing to pay fees to use Apple Pay because of the ease and security of using Apple Pay and, on that basis, see an opportunity to introduce and condition the market to transaction fees for the use of Apple Pay, with the longer term view to setting a precedent for charging for mobile payments on other digital wallets, in the future, including the banks’ own proprietary wallets."

The banks responded later on Monday with a statement claiming Apple's interpretation was wrong:

The application has never been about preventing Apple Pay from coming to Australia or reducing competition between wallets. It has always been about providing real choice and real competition for consumers and facilitating innovation and investment in the digital wallet functionality available to Australians. Apple's statement that the application is fundamentally about an objection to the fees that Apple wish to be given rather than NFC access, is incorrect and unsupported.

According to the banks, the applicants will soon provide a response to the ACCC's draft decision that would further demonstrate the net public benefits of the application.

Related Roundup: Apple Pay

Top Rated Comments

barefootman Avatar
94 months ago
Banks in Australia are notoriously greedy. They make billions in profits every year and will squeeze every last cent out of you if you let them. It's hardly surprising that the federal opposition wants to introduce a Royal Commission into the banking industry.
Score: 5 Votes (Like | Disagree)
Kroo Avatar
94 months ago
ANZ have absolutely no issue with providing Apple Pay. The others are greedy turds who still allow unsecured payments like tap and go to continue, leaving a gaping hole in their argument about providing competition to Apple Pay. HOW, when they don't care about the hundreds of millions of dollars that get ripped off the customers already? Remember that the customer pays for this fraud in the fees they pay, not the banks. A note to Westpac, you can stick your accounts where the sun don't shine, I'm moving to ANZ. I hope your CEO chokes on their $2 mil bonus this year for holding your clients up for ransom.
Score: 4 Votes (Like | Disagree)
Macyourdayy Avatar
94 months ago
I hate the banks with a passion, but since when was making a profit illegal or cause for calling a royal commission, really? If the Oz banks weren't profitable Australia would've been in a pile of crap during the GFC. This call for a royal commission is just a smokescreen for Billy Shortonbrains to detract from his illegal involvements with corrupt unions.
We would have been in the same toilet as the rest of the world if the banks got their wishes to decrease fiduciary controls on their activities like in the US, never mind they tried to restrict credit access to the general population "because of the GFC".
I'm just amazed that ANZ broke ranks and ran with Apple Pay. This has to give them increasing competitive advantage the longer the other ass clowns keep stamping their feet. I was considering moving back to ConnBank since the incompetent pricks at Westpac infected St George with their money grubbing, anti-customer arrogance, but I'll stick with ANZ for my credit cards and keep amazing the young people every time I Apple Pay.
[doublepost=1486384861][/doublepost]
You'll get no argument from your fellow Australians on our banks being notoriously greedy. However so too is Apple Australia. For decades they have gorged Australian consumers, all the while cooking the books so that they pay no tax in Australia. At least the banks pay tax.

I've got no sympathy for either side. They're both greedy arseholes.
You mean like all the other multi nationals? Why still go on about the cost of Apple products? When you factor in the "value" of the pacific peso and GST, it's about the same as US prices and they don't show tax. Besides, what's your time worth if you have to battle cheap, but unreliable tools?
Score: 4 Votes (Like | Disagree)
abhibeckert Avatar
94 months ago
I love how the banks have access to Android Pay and have basically done f-all with it more than you can do with Apple Pay. The banks are pissed that they don't have access to the data and marketing to of Apple customers as they spend a lot more than Android.
If the banks want to prove they need access to NFC, why don't they do something to Android that proves customers actually want something not available on Apple first?
Commbank's Android app has had NFC for almost 2 years.

Instead of storing payment credentials in dedicated secure hardware in the phone (how Apple Pay works), Commbank's Android app stores your card in the cloud, which means when you want to make a payment:

* unlock your phone
* launch the app
* tap the "tap and pay" button
* enter your PIN number
* wait for it to download your payment credentials from the cloud
* hold your phone over the contactless payment terminal

Once that's done, payment credentials are deleted from the phone, since that's not a secure place to keep them.

It's a mess and almost nobody uses it.
[doublepost=1486418808][/doublepost]
I love unambiguous talk! Note to self: if/when I move to your glorious continent, I'll deal with ANZ, lol
ANZ is the only major bank (they control around a trillion dollars in assets) that supports Apple Pay in Australia.

There are several dozen smaller banks that also support Apple Pay. Personally I use CUA, they're a "small" bank (assets around 10 billion dollars), but large enough to have branches in every city nationwide and just as many ATMs/etc as the major banks.
Btw, you're right on about those banking fees. I remember a time when all those fees hardly existed and banks made their money mostly off investing depositor's funds.
Which is why I use CUA. They only have two fees - interest if I had a loan with them (I don't) and a limit to how many free transactions can be made make each week.

The free transaction limit depends on your account balance. My (very modest) savings account is with CUA and that's enough to ogive me unlimited free transactions.

When I didn't have my savings with them, I was only paying around $2 per month on transaction fees.
Score: 3 Votes (Like | Disagree)
Russel Coit Avatar
94 months ago
Banks in Australia are notoriously greedy. They make billions in profits every year and will squeeze every last cent out of you if you let them. It's hardly surprising that the federal opposition wants to introduce a Royal Commission into the banking industry.
You'll get no argument from your fellow Australians on our banks being notoriously greedy. However so too is Apple Australia. For decades they have gorged Australian consumers, all the while cooking the books so that they pay no tax in Australia. At least the banks pay tax.

I've got no sympathy for either side. They're both greedy arseholes.
Score: 3 Votes (Like | Disagree)
Juiceboy Avatar
94 months ago
I'm so glad i'm with ANZ. Apple pay is so damn fun to use. Everyone still goes wow anytime i use the watch
Score: 2 Votes (Like | Disagree)

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