Apple Lambasts Australian Banks Over Call For iPhone NFC Access

[kdarling]

All true. They are bringing hundreds of millions of committed customers to a platform at a cost well below traditional methods like direct mail and TV ads. One value added thing they do bring is an added security layer. You discount that, but should not.

What "added security layer" is that? If you mean a passcode or fingerprint, then any app can use those.

Apple brings no extra security to a contactless transaction, since they're not part of it. That's done by the appropriately named Secure Element and its MC/Visa/AMEX/Disc applets.

Having been involved in payment systems, "access to NFC hardware" shows us what the real issue is - who is skimming the interchange fees. If the bank can route the transaction (through bypassing ApplePay), then their existing channels can continue to skim fees along the way. If Apple route the transaction, the banks may lose some control over who they award these "cash cow" contracts to.

Okay, a lot of you still don't get it. Apple does not "route" anything, since it is NOT involved in a contactless payment (which is why banks don't see any reason to pay them). "Apple Pay" is just an app presenting a UI. Here:

You see the blue App part? That can be "Apple Pay" or "My Bank Pay" or whatever you want.

When you tap with a card YOU have registered to THAT particular app, it'll be woken up to authenticate the purchase with a passcode or finger, and EVERYTHING else is done by the Java applets in the Secure Element, which are written by the various credit card schemes.

In other words, the only difference between now and if you use your bank's NFC wallet, is which app you see automatically appear.

Or for that matter, if you tapped at a department store and you had that store's special card registered, the store app would wake up. Then, like with the Walmart Pay app, it could automatically add discounts etc.

Not to mention that in say, London, your Oyster app could wake up and pay your ticket.

There's no reason or need to use one app like "Apple Pay" for all those things. This is just part of the power of NFC in every other device out there.

I loved the comment about being proud of our "fellow" Aussies. Could this have possibly come from someone in Australia? Consumer satisfaction ratings show we're largely disgusted by the decisions made by people working for our banks. We can't remember the last time a bank did "the right thing" without being forced to by a court order.

So your choice is between giving money to a greedy Australia bank, or to a greedy American megacorporation

In the former case, you get to keep extra card awards especially for debit, plus the fee money stays in your country to be used for mortgages and other loans. Since NFC is open, you also get to choose ANY bank that has an NFC app. YOU are in control of contactless payments.

But in the latter case, the fee money goes into an Apple bank off your shores, never to be seen again. And Apple controls what banks you can use, not you, depending on who will pay a ransom to access their own customers.

Ditto for cool NFC stuff like transportation tickets, Bluetooth registration, door unlocking, tap data transfers, etc. That's all under Apple's discretion and timetable, if at all.

But sure, if you like being a purchased subject of an American company, welcome aboard

 

[Rocketman]

But in the latter case, the fee money goes into an Apple bank off your shores, never to be seen again. And Apple controls what banks you can use, not you, depending on who will pay a ransom to access their own customers.

But sure, if you like being a purchased subject of an American company, welcome aboard

Thanks!

 

[Tech198]

It would only compromise Apple's hardware if they stopped supporting other methods.. but u know Apple..

They could just do this as well..

Apple just reckons every iPhone user should be using NFC...

Its no longer your phone anymore to pay.. It's Apple's phone. Its only your own phone to store personal info.

 

[PBRsg]

If you think ANZ is bad, you haven't tried the others in the big 4.

When you have as little competition as 4 banks in an entire country, it is inevitable that they are all going to pretty much stink. Then again, Australia is the land of the duopoly, so having FOUR "competing" banks is better than the general going rate.

 

[theotherphil]

On a different track, I wonder why some of the smaller banks haven't thought about signing deals with Apple? I know it's usually the big banks before the small banks, but if Apple were to get some of the smaller credit unions onboard before the last major 3, they'd really look stupid.

A friend of mine who works in a privileged position in one of the big building societies has told me that they will be supporting ApplePay soon.
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Interesting choice of words by Apple to label the collective banks a "cartel" in their rebuttal.

Sounds just like Apple doesn't it? Pot, meet kettle.

The banks labeled themselves a cartel in their application. See page 2:

http://registers.accc.gov.au/conten...mVersionId=1197735&trimFileName=D16+98591.pdf

 

[theotherphil]

Yeah. I'm sure you do (rolling eyes now.) Is the UK even in Europe anymore?

Don't confuse the continent with the boys club

 

[noisycats]

They had me at 'opprobrium'

 

[SandboxGeneral]

The banks labeled themselves a cartel in their application. See page 2:

Interesting. Thanks for pointing that out, it changes how I viewed this story with my earlier post.

 

[kdarling]

Interesting. Thanks for pointing that out, it changes how I viewed this story with my earlier post.

Just wanted to note that neither side picked that phrase.

"Cartel" is the legal term required by the Competition and Consumer Act, for any situation where multiple companies want to negotiate as a group.

Which can be unfortunate, PR wise, since to many people, 'cartel' has negative connotations.

 

[tmanto02]

That's good to know. Everyone I've talked to has said the iOS app for ANZ has been awful. Do they also have an Apple Watch app? Quickly glancing at my balance is both useful and addictive.

I've just switched from St George to ANZ. The St George App is way better, but ANZ has all the basic functions you need - the main thing it's missing is detail on pending transactions.

 

[BlueParadox]

My post is the entirety of what I wrote in response to your ridiculous pro-Australian bank stance. Yes, the banks here in Australia do have access to this information BUT currently they cannot do anything anything with this info (possibly selling to 3rd parties, etc?). My concern is why the banks are so determined to thwart more choices for their customers here in Australia, particularly in regards to Apple Pay. If money and cost are factors, then Apple Pay will only save the banks millions due to the security used in the technology. Unlike the recent security flaw discovered in Samsung Pay, which Samsung are very aware of but label an 'acceptable' potential risk...
[doublepost=1471221323][/doublepost]

This post makes no sense.

The banks already get all the same purchase information, since they are the purchase approvers.

Heck, that's partly why banks were willing to pay Apple... to continue getting this information. Unlike with, say, the original Google Wallet which anonymized our purchase info from the banks.

 

[kdarling]

My post is the entirety of what I wrote in response to your ridiculous pro-Australian bank stance.

It wasn't pro-bank. It was pro taking a group stance against Apple locking out everyone else from using NFC.

My concern is why the banks are so determined to thwart more choices for their customers here in Australia, particularly in regards to Apple Pay.

That's what a lot of us don't get: this idea that only Apple should be allowed to thwart more choices.

If NFC was open, then you the customer would have more choices as to what wallet to use. The tokenized EMV contactless payment communications could even stay the same, since Apple didn't write or own any of that.

If money and cost are factors, then Apple Pay will only save the banks millions due to the security used in the technology.

The security used in the payment technology is not of Apple's doing. That part is all done by credit card and bank code.

The only technology Apple contributes is the optional use of the fingerprint scanner, which the bank apps could use as well, if only Apple let them access NFC for the comms.

Opening NFC would therefore be just as secure, but save the banks millions that Apple wants for itself.

Unlike the recent security flaw discovered in Samsung Pay, which Samsung are very aware of but label an 'acceptable' potential risk...

Well, yeah, since a similar kind of intercepted token attack has been deemed acceptable on NFC payments.

Remember, most payment flaws found by hackers require some special circumstances to work.

In this case, a magnetic skimmer stealing a one-time payment token would also have to somehow jam the original signal from reaching the original terminal, something that was not demonstrated, and might not even be possible.

Even if it could, it results in the actual user's purchase failing, while getting an receipt for a purchase they didn't make somewhere else (kind of a dead giveaway that someone else used a one-time purchase token belonging to you).

Likewise, it has been judged an acceptable risk for Apple Pay to use a fingerprint, which can easily be duplicated if someone spent a little time around their intended target. Heck, it's even an acceptable risk to use PINs, which can be shoulder surfed even easier.

Nothing is perfect. There's acceptable risk in everything.

 

[Roadstar]

It wasn't pro-bank. It was pro taking a group stance against Apple locking out everyone else from using NFC.

This. Based on the posts in this thread it looks like the Australian banks are quite a shady bunch. However, while the Australian banks might not be the ones you'd like to side with, opening up NFC would help also customers of decent banks in countries where Apple still hasn't bothered with Apple Pay. Currently our banks are offering nice apps with payment integration for Android while the iOS versions lack the payment options for obvious reasons. I was hoping that NFC were like TouchID, i.e. first year it would be Apple exclusive and then opened up to 3rd party developers, but unfortunately that hasn't happened, so the NFC hardware in my phone just continues sitting there with no way for me to make use of it. Of course we'll still pay a highly inflated price for the device even though we'll get to use only a subset of its features.

 

[makr]

Yeah. I'm sure you do (rolling eyes now.) Is the UK even in Europe anymore?

Yes it's still in Europe, as its a continent. It will be in EU for a while too.

 

[JKAussieSkater]

Nope, I'm disgusted in my bank (Commonwealth) for partaking in these 'fighting' matches with Apple, and they're paying for it by loosing customers to ANZ.

You should be "disgusted" in the Commonwealth Bank for legitimate reasons, such as their high fees, low-return interest rates, changing interest rates without informing customers and the unnecessary restrictions on automatic transfers from netsaver accounts to other ones.

Being "disgusted" in the Commonwealth Bank for not buying into Apple's morally questionable fees?
Hmmm, fanboy alert, I think.

I want Apple Pay, and I don't want the banks accessing the NFC.
They'd use their lame applications, and it wouldn't be tied into the OS like Apple Pay is.

That's just paranoia. What harm, intentional or unintentional, could having access to NFC do to you?

You do realise that NFC is used in public transport ticketing systems, such as myki and Opal . . . Giving 3rd parties access to the NFC would allow you to use your iPhone as a means of public transport. A complete wallet replacement. This presents awesome opportunities for iPhone users.

Oh, but then we'd have to use "lame applications", which aren't "tied into the OS". I suppose you would prefer Apple develop an NFC AppleTravel system for iOS, and have them charge public transport operators a fee for every time a person uses AppleTravel to pay for their commuting? This would be good, because we wouldn't want the public transport operators accessing the NFC, because paranoia.

Apple's right. The Aussie Banks are just being greedy themselves.

Let's think this through. If the banks were to just accept Apple's fees, do you think that these "greedy banks" would simply absorb the costs of the Apple toll? The answer is a glaringly obvious "NO", of course they would offset the charges to the customers. They're greedy, as you said so yourself. They'll either charge customers for using ApplePay, or they'll increase their bank fees, or raise their loan interest rates, or decrease their investment account interest rates . . . They don't want to sacrifice on profits!

By the banks fighting Apple for lower fees, greedy or not, the bank customers (i.e. you) win the war via the reduced offset costs.

And lets be honest here, Apple's greedy too.

Get on-board or loose more customers, it seems.

Stop saying that. You've said it twice now. Nobody's loosening anybody's belts or ties.

You mean "lose" and "losing". Use those words next time.

 

[ErikGrim]

Giving 3rd parties access to the NFC would allow you to use your iPhone as a means of public transport. A complete wallet replacement. This presents awesome opportunities for iPhone users.

You do realise that ApplePay can be used instead of Myki/Opal/GoCard yeah? See: London/Oyster.

https://tfl.gov.uk/fares-and-paymen...of-contactless-payment/apple-pay?cid=applepay

 

[JKAussieSkater]

You do realise that ApplePay can be used instead of Myki/Opal/GoCard yeah? See: London/Oyster.

https://tfl.gov.uk/fares-and-paymen...of-contactless-payment/apple-pay?cid=applepay

That's pretty cool!
Does it work for regular physical credit cards too?

 

[ErikGrim]

That's pretty cool!
Does it work for regular physical credit cards too?

Apparently. https://tfl.gov.uk/fares-and-payments/contactless/how-to-use-it

 

[D582]

I don't fully buy into the security issues with allowing third-party apps to access and use the NFC radio for communications. The secure element used for Apple Pay is separate from this.

If a bank wants to offer a contactless payment app using Host Card Emulation via NFC with their app running in the foreground, then they should be able to. But that does not mean that Apple has to allow the UX for that to be equivalent to Apple Pay.

 

[kdarling]

You do realise that ApplePay can be used instead of Myki/Opal/GoCard yeah? See: London/Oyster.

Doesn't cover any special cards of course.

(Student, child, elderly, etc)

But then nothing else does either, I don't think. Oyster needs to write a smartphone NFC app for those cases, with the user's photo in it for verification.

 

[brutus007]

I love Apple stuff but that's a bit rich coming from them.

this could actually be interesting even though the apple pay system introduces and new risk to payments. The Banks could offer a discount in fees if their own product is used. So payments through apple pay could become more expensive than through the banks system. This would highlife the real effect of apple pay by not spreading the cost across all customers who may not use the same delivery system. if the banks are smart they could absolutely kill Apple Pay. If responsibility of fraud through Apple Pay system occurs, Apple should be obligated to make good on the loss the way the banks do. This could sink the whole Apple company.
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Commonwealth, NAB and Westpac take note...

ANZ didn't want to deal with your sh*t, and they partnered with Apple months ago. Guess what, ANZ has claimed over 50,000 new customers moving their bank accounts and credit cards over to use Apple Pay.

Please for the love of god just accept Apple's fees!!!

It ultimately will be you who have to accept the fees as additional. I have no love for the big banks but Apple does literally nothing for their fees. The banks on the other hand exist in Australia to run the payments system. The banks system is much safer in Australia than the system was in the US. Apple represents a loss of security in Australia.

 

[uroshnor]

this could actually be interesting even though the apple pay system introduces and new risk to payments. The Banks could offer a discount in fees if their own product is used. So payments through apple pay could become more expensive than through the banks system. This would highlife the real effect of apple pay by not spreading the cost across all customers who may not use the same delivery system. if the banks are smart they could absolutely kill Apple Pay. If responsibility of fraud through Apple Pay system occurs, Apple should be obligated to make good on the loss the way the banks do. This could sink the whole Apple company.
[doublepost=1486784903][/doublepost]
It ultimately will be you who have to accept the fees as additional. I have no love for the big banks but Apple does literally nothing for their fees. The banks on the other hand exist in Australia to run the payments system. The banks system is much safer in Australia than the system was in the US. Apple represents a loss of security in Australia.

It doesn't, really. The big 4 banks in Australia have done appalling things at times with mobile - not encrypting local data, using old versions of SSL, not certificate pinning their Apps etc. They have gotten better over time, but several of them had products that were comically bad in terms of security.

Personally I want one wallet on the device. I don't want to have to go to a CBA App to use a CBA card, a NAB App to use an NAB card etc.

The banks & card issuers add value by making the transaction lower friction & getting out of the way in the UX, not by injecting brand presence.

Apple owns the whole widget - they can't simply allow arbitrary third party applets get installed without a certification cost / UX complexity mess pretty rapidly.

Would CBA be expected to allow a NAB applet get installed on one of their cards ? Of course not.

I get they fear commoditization , but I don't carry 4 proprietary wallets for physical cards today, why should I want to do it digitally ?

Apple already has API's to support in App and Web transactions / the banks would be far better to negotiate the APIs they need to anchor on the hardware in their Apps for thinks like ATM access , peer-peer payment etc .

 

[Peter K.]

ahhh.....another 'opprobrium'......

http://www.oxforddictionaries.com/definition/english/opprobrium

I had to look it up, too.