Apple Pay Expands Beyond American Express in Australia with ANZ Support

[rjohnstone]

No, i do not have it backwards.

Actually, apple did build the protocol which actually protects the consumer from disclosure of their credit card information (i'm not talking about chip and pin payment, that is not what apple pay is). Yes, ApplePay sits on top of the existing payment network that the bank's rolled out, but there is a lot more to it than that. It's an additional layer, with additional protection for both the bank and the customer.

ApplePay is not plain EMV as far as the customer is concerned, as the transaction is between Apple's account and the merchant; the merchant transaction is with Apple and Apple bills the user. It provides privacy and protection for the user (from the merchant) that standard EMV does not. It is resistant to replay attacks, for example as each transaction has a unique single use transaction ID. This is what Apple developed and provides advantages for the customer that other payment services including standard chip and pin do not. This was not free for Apple to develop.

Apple Pay uses the EMV protocols to tokenize the transaction. They did not invent or build it. They went to Visa/MC/Amex to collaborate some of the processing aspects of using the anonymized token of the transaction.
The tokenization key is generated by the card issuer when the card is registered, not by Apple.
That key is stored in the secure enclave on the phone. Apple does not see this and has no access to it.

Apple's only involvement in the transaction is generating the tokenized card number, which is done on the phone using the key provided by the card issuer.

as the transaction is between Apple's account and the merchant; the merchant transaction is with Apple and Apple bills the user

This is completely wrong.

This is not an iTunes transaction, it's a tokenized transaction over the merchant/banks network between the card holder and the merchant.
No data is sent between Apple and the merchant during a transaction.

Apple Pay does not "sit on top of" the existing payment network. It is used in conjunction with the network the same way a physical card is used.

 

[jm001]

Just wanted to inform others in Canada that ApplePay now works with CIBC Visa and Debit cards! Wooo hooo!

https://www.cibc.com/en/personal-banking/ways-to-bank/ways-to-pay/apple-pay.html

 

[Koalazub]

That's not just bad but also unfair if they have to charge us according to the exchange rates. Also, does AmEx charge a fee?

AmEx does have a higher premium for use of its services here in Australia. A lot of businesses tend to add a surcharge in order to offset the merchant fees involved, some exceeding 5%(or 10 times the merchant fees, to put things in perspective)! Legitimacy of the size of the surcharge aside, there would be a baseline charge per transaction made by any credit company including Australian companies. I assume the reason why AmEx charges more is because it is a foreign country and therefore it follows more stringent laws with regards to transactions and tax. But the stuff I mentioned previously about taxes and transactions is just an assumption.

Slightly relevant:
I have read news of AmEx reducing its merchant fees. So maybe that will allow it to eat into The Big Four's market share and reduce all transactional fees.

http://www.creditcardfinder.com.au/american-express-retailer-merchant-fees-dropping.html

 

[s1m]

AmEx does have a higher premium for use of its services here in Australia. A lot of businesses tend to add a surcharge in order to offset the merchant fees involved, some exceeding 5%(or 10 times the merchant fees, to put things in perspective)!

I have never seen a surcharge of over 3% when using Amex (for the past 10 years in Australia). When I started using Amex the base was incredibly low - it was only once Coles and Woolies started accepting it that it has taking a stronger foothold here. It is a shame that they have trashed the services provided and jacked up the fees as well.

 

[kdarling]

Apple Pay uses the EMV protocols to tokenize the transaction. They did not invent or build it. They went to Visa/MC/Amex to collaborate some of the processing aspects of using the anonymized token of the transaction.

Apple set up the registration path (although that's done only so they can control the gateway to the Secure Element, and thus ransom their customers to the banks). After that, they have little part in the actual transaction (see below).

The tokenization key is generated by the card issuer when the card is registered, not by Apple.
That key is stored in the secure enclave on the phone. Apple does not see this and has no access to it.

Correct. The Token Processors, often at the credit card network level, are the ones who generate the tokens and control the translation between token and real account number. Apple has no part in the tokenization.

Apple's only involvement in the transaction is generating the tokenized card number, which is done on the phone using the key provided by the card issuer.

Apple has no part in that, either. The Java payment applets used in the Secure Element are owned and written by the credit card networks, same as the ones used in physical chip cards.

After registration, Apple's sole part in a contactless transaction is for its code onboard the iPhone or Watch, to tell the Secure Element that the user has been verified (by PIN or fingerprint), and to present a pretty UI.

The actual card emulation, tokenization, creation of cryptograms, payment, etc are all done by the Java applets that Apple has no access to.

Apple Pay does not "sit on top of" the existing payment network. It is used in conjunction with the network the same way a physical card is used.

Exactly. It's Apple's branding of their inclusion of a contactless card emulation written by others.

Now, non-contactless in-app payment is a different animal, as then Apple servers are involved in sending the transaction to the backend payment systems.

 

[ccrgt]

Here in Australia, I have been a customer of St George bank for many many years. I waited and waited this last few months to see if St George would follow ANZ's lead and get Apple Pay but no... So I switched over to ANZ this week. I have been using Apple Pay with my watch all day today and it works very very well. Almost all stores support contactless/pay wave transactions and it was so easy to just flip my watch to pay for things. I own a great deal of Apple's products and being able to use the watch to pay for everything is the icing on the cake. Woohooooooo!

 

[Shirasaki]

Here in Australia, I have been a customer of St George bank for many many years. I waited and waited this last few months to see if St George would follow ANZ's lead and get Apple Pay but no... So I switched over to ANZ this week. I have been using Apple Pay with my watch all day today and it works very very well. Almost all stores support contactless/pay wave transactions and it was so easy to just flip my watch to pay for things. I own a great deal of Apple's products and being able to use the watch to pay for everything is the icing on the cake. Woohooooooo!

Your description is so attractive that I want to jump the ship. I am now a Commonwealth Bank user. Hmm.

 

[ccrgt]

@Shirasaki I would change, it is so handy and is easy to use. I can now leave my wallet and handbag at home!

 

[Shirasaki]

@Shirasaki I would change, it is so handy and is easy to use. I can now leave my wallet and handbag at home!

Which is truly a bonus overall right?
Wanna jump the boat but I may need to wait a bit longer, for the hope that Commonwealth Bank would jump the ship, join Apple Pay as well.

 

[uroshnor]

Your description is so attractive that I want to jump the ship. I am now a Commonwealth Bank user. Hmm.

ANZ was way behind the other big 4 banks in Mobile, and new management knew it , and was lucky with timing , being able to pick up Apple Pay, and now Android Pay at an opportune moment. They've essentially leapfrogged the others in less than a year, and nailed it.

All the other banks misread the market and have screwed themselves with a mixture of bad judgement, lack of customer focus and in some cases utter hubris. ANZ correctly read the market that a) iOS users are frequently more valuable customers worth attracting & keeping and b) virtually all iOS users would rather miss out on the feature, or switch banks, rather then switch device platform.

CBA moved early, and is now deeply invested in their proprietary solution, which doesn't (and will likely never) work on iOS. They don't comprehend that the vast majority of iOS customers would rather switch banks than mobile device platforms. Perversely, CBA are probably the closest of the big 4 to Apple in terms of customer privacy philosophy, but suffer badly from a paranoid & arrogant "not-invented-here" syndrome in the technology space in general - they are their own worst enemy at times.

Westpac is a complete mess from a technology execution standpoint , and is probably incapable of understanding the nexus of customers and technology. They went exclusively with Samsung Pay, which is beyond bizarre, and you'd really have to assume Samsung bankrolled it in order to have A partner in Australia. You can say what you like about Samsung, but they don't blink at throwing marketing money, free hardware & televisions, discounts and saying yes to every dumb idea in order to win the deal.

NAB lead with Android Pay, again, confusing market share with value, but I'd bet they'd be the next Apple Pay vendor in Australia as in many ways they are philosophically aligned to ANZ.

 

[s1m]

Slightly odd change of fortunes for me. I have now switched away from Amex as my primary payment card and am now using Hilton Macquarrie Visa so I am now hanging out for them to move to Apple Pay - although as I should soon be getting my Kerv payment ring Apple Pay might not be the move for me in the long run.

 

[Shirasaki]

ANZ was way behind the other big 4 banks in Mobile, and new management knew it , and was lucky with timing , being able to pick up Apple Pay, and now Android Pay at an opportune moment. They've essentially leapfrogged the others in less than a year, and nailed it.

All the other banks misread the market and have screwed themselves with a mixture of bad judgement, lack of customer focus and in some cases utter hubris. ANZ correctly read the market that a) iOS users are frequently more valuable customers worth attracting & keeping and b) virtually all iOS users would rather miss out on the feature, or switch banks, rather then switch device platform.

CBA moved early, and is now deeply invested in their proprietary solution, which doesn't (and will likely never) work on iOS. They don't comprehend that the vast majority of iOS customers would rather switch banks than mobile device platforms. Perversely, CBA are probably the closest of the big 4 to Apple in terms of customer privacy philosophy, but suffer badly from a paranoid & arrogant "not-invented-here" syndrome in the technology space in general - they are their own worst enemy at times.

Westpac is a complete mess from a technology execution standpoint , and is probably incapable of understanding the nexus of customers and technology. They went exclusively with Samsung Pay, which is beyond bizarre, and you'd really have to assume Samsung bankrolled it in order to have A partner in Australia. You can say what you like about Samsung, but they don't blink at throwing marketing money, free hardware & televisions, discounts and saying yes to every dumb idea in order to win the deal.

NAB lead with Android Pay, again, confusing market share with value, but I'd bet they'd be the next Apple Pay vendor in Australia as in many ways they are philosophically aligned to ANZ.

Very good analysis of all main banks in Australia. I really appreciate it.
Perhaps I need to jump the ship when timing is right, although I need more reasons.

 

[Steeley]

Here in Australia, I have been a customer of St George bank for many many years. I waited and waited this last few months to see if St George would follow ANZ's lead and get Apple Pay but no... So I switched over to ANZ this week. I have been using Apple Pay with my watch all day today and it works very very well. Almost all stores support contactless/pay wave transactions and it was so easy to just flip my watch to pay for things. I own a great deal of Apple's products and being able to use the watch to pay for everything is the icing on the cake. Woohooooooo!

Are you using a Visa debit card? I'm trying to find out if pending transactions show up on internet banking straight away. Can you let me know?