Apple Says Australian Banks' Apple Pay Challenge Harms Consumers

[kdarling]

wait, collusion is legal in australia?

No, it isn't, which is why several banks have applied for government permission to collectively negotiate.

So can someone tell me if android pay takes a cut from transactions, like Apple Pay does?

Banks do not pay a fee for supprting Android Pay (ref WSJ). Google reportedly tried for one at first, though.

OTOH, Samsung didn't ask for a fee for Samsung Pay. They see it as just another feature to sell phones, not as an external revenue stream like Apple does.

 

[Lancer]

The banks just don't want to loose any of the multi billion dollar profits they are making every year, maybe one should break away and make a deal forcing the others to join in or loose business.

 

[MH01]

The banks just don't want to loose any of the multi billion dollar profits they are making every year, maybe one should break away and make a deal forcing the others to join in or loose business.

so why should apple take those profits? Unlike android or Samsung pay, apple wants to make money out of our transactions.....I will feel some sympathy for apple if they pass on the saving or reduce prices in Oz, though every year my iPhone prices go up and so does apple care....apple is being greedy here and wanting to control its customers

 

[Kroo]

Wow, read some of the linked history... Apple argued that these three banks "want to maintain complete control over their customers", which should be unacceptable, yet Apple maintains complete control over Apple's customers by not allowing other payment systems on iOS. Apple believes they are the only party that should be allowed this kind of control. The three banks are actually arguing for giving their customers CHOICE of payment systems, not just forcing Apple pay on them. just wow...

Apple already has ANZ on Apple pay in Australia, so competition exists. All three banks should individually refuse to negotiate until Apple opens the NFC platform to other payment systems - this high level demand is general enough and also just plain common sense and does not constitute collusion, so each taking this individual stance would not violate anti-trust laws.

Why doesn't Apple also open the platform to 3rd party apps sold outside their captive app store directly by developers (like OS X currently does)???? How long will Apple get away with "maintaining complete control over their customers" when it involves what apps a iOS device owner can install on their phone? In such an 'open' iOS system, customers could choose to just stick with the Apple App Store instead of buying apps outside - this is called consumer choice.. but Apple only believes arguing "consumer choice" is a tool for getting THEIR control.

...But, Apple's global market share is in a downward trend... so it may not matter... the end is near if they keep clinging to their "world domination" delusion. I'm sick of hearing how Apple claims they're "so good" at solving whatever particular "problem" exists in the world today, yet then using exclusionary tactics that harms competition when implementing their "solution". It is really starting to get old.... NFC pay can be big in the future, yet iOS owners will be forced to use Apple Pay where as other platforms will offer choice of NFC payment systems (Android is planning this).. so in the end, Apple is also harming their own platform. Not smart... because...

Eventually iOS will have the same ~5% market share as Mac.. and it will be Apple's own stingy fault by trying to enforce a closed system.... The end...

Because the banks and the merchant can access you data, thats why. They can then use it and sell it to target market users. Apple uses an encryption where no-one knows who you are or what or where you've spent your money, not even Apple. Only a fool would hand their technology over to banks and merchants to corrupt or use to make even more money from. Unless you weren't aware, Australian banks are amount the highest fee charging banks on the planet, and this is all about control of the millions each year in transaction fees. All these banks make obscene profits year on year, whilst the global market is actually levelling out and even shrinking. There is no competition in the Australian banking industry, but hey, lets just jump on a subject we know nothing about just for an excursion in Apple bashing. Seems like the usual offenders are here doing just that, again. How sad MR has become the home of the anti Apple brigade. BTW, Google do use your data to sell for marketing, as does Samsung and others, Apple does not!

 

[Nevaborn]

Banks can add whatever system they like over there but as far as I am concerned Apple Pay works well. It it set up through my Bank and the bank working with Apple makes it a quick and easy system.

The only problem I have is store cards, I need to be able to add my store loyalty cards to Wallet if I am to ever ditch a real wallet and in this Apple has spectacularly failed.

 

[Kroo]

May I

No, it isn't, which is why several banks have applied for government permission to collectively negotiate.



Banks do not pay a fee for supprting Android Pay (ref WSJ). Google reportedly tried for one at first, though.

OTOH, Samsung didn't ask for a fee for Samsung Pay. They see it as just another feature to sell phones, not as an external revenue stream like Apple does.

May I kindly ask what your experience with the Australian banking industry is, or is this a vehicle to bash Apple on a subject most people know little to nothing about?

Also, doesn't Samsung and google use your data to target market you, even your payments on their systems? Apple don't do that BTW, but what was the slogan, don't be evil? Just pilfer users data to make billions in advertising at you. Yep, the moral high ground looks rather unstable right there.
[doublepost=1472545115][/doublepost]

so why should apple take those profits? Unlike android or Samsung pay, apple wants to make money out of our transactions.....I will feel some sympathy for apple if they pass on the saving or reduce prices in Oz, though every year my iPhone prices go up and so does apple care....apple is being greedy here and wanting to control its customers

So Apple provide an encrypted secure payment system, first in the world, that not even the banks can provide, and they should do that from the kindness of their heart? Maybe ask the banks to charge no fees at all, then we wouldn't have an issue at all?

 

[GadgetBen]

Basically Apple claims that consumers will be harmed until Apple themselves has complete control of all consumers lives....

I'd rather have Apple in charge of my personal life than my bank.

 

[Kroo]

Android and Samsung pay don't take a cut of the interchange fee.

But they will use your data to target market you, making billions off you in the process. Yep, seems legit. Apple are so damn evil.

 

[GadgetBen]

May I



May I kindly ask what your experience with the Australian banking industry is, or is this a vehicle to bash Apple on a subject most people know little to nothing about?

Also, doesn't Samsung and google use your data to target market you, even your payments on their systems? Apple don't do that BTW, but what was the slogan, don't be evil? Just pilfer users data to make billions in advertising at you. Yep, the moral high ground looks rather unstable right there.
[doublepost=1472545115][/doublepost]


So Apple provide an encrypted secure payment system, first in the world, that not even the banks can provide, and they should do that from the kindness of their heart? Maybe ask the banks to charge no fees at all, then we wouldn't have an issue at all?

Couldn't agree more. Apple are not going to open their hardware for a bank and they shouldn't have to.

All of this boils down to a power battle and show of strength from the banks - which ultimately means that the Australian consumer loses out.

 

[Morgenland]

Stupid banks. They should just sign up to Apple Pay like the rest of the world so we can start using it!!

I fully agree with your clear statement. The same here in Germany with those yesterday banks.

 

[fermat-au]

Both Apple and the banks are acting fairly arrogantly. As many other Australians have pointed out in in other thread about this, in Australia we have had NFC card for awhile now. In the US NFC payments are new, so for many people ApplePay will be their first experience of NFC payment. In Australia the whole NFC infrastructure existed pre ApplePay and worked well. Apple then comes to Australia and arrogantly expects to be able implement ApplePay here, the way they did in he US with a similar cut for them. I think Apple almost see themselves as a saviour, bringing a great NFC payment system to consumers and merchants. Australia has far less need for a revolutionary NFC payment system than the US.

If I were running one the big banks, I would run a high profile campaign that you can pay with you Android phone.

 

[macfacts]

But they will use your data to target market you, making billions off you in the process. Yep, seems legit. Apple are so damn evil.

No one cares about targeted advertising except for people wearing tin foil hats.

 

[tw1ll]

No one cares about targeted advertising except for people wearing tin foil hats.

People are entitled to have their sense of privacy - even online. However, I'm with you - but, the day that aggregated data use by commercial organisations goes beyond the irritation of targeted advertising I would imagine there will be a public backlash. I only hate (all) advertising because it is now getting to the point that websites (even "newspapers" behind paywalls) contain so much advertising that pages are slow, fail to render and are just plain irritating. It amazes me that advertisers think that annoying people will sell product.

 

[Johnny London]

When they say "They harm consumers" what they mean is that Apple would take away profits from Aussie banks. Which is exactly what a nanny state and business ally would say. I say: Banks are thiefs. Let banks compete with Apple, his can only help the consumer.

 

[MH01]

So Apple provide an encrypted secure payment system, first in the world, that not even the banks can provide, and they should do that from the kindness of their heart? Maybe ask the banks to charge no fees at all, then we wouldn't have an issue at all?

Take a step back. You are paying for NFC hardware in a device ....and you don't believe you have right to use that hardware , and that hardware should be only used so apple can ransom it for Apple Pay purposes?

Can you imagine any NFC benfits with the iPhone. I'm happy for governments to break the ApplePay monopoly on iPhones, so I can access the features of NFC. You can continue to use Apple Pay.....you have a choice , why can the rest of us not get a choice?

 

[SurferPup]

Apple today made a submission to the Australian Competition & Consumer Commission (ACCC), arguing that Australia's "Big Three" banks' request to collectively negotiate over Apple Pay is ultimately harmful to consumers, would stifle innovation in mobile payments, and would avoid competitive dynamics (via AppleInsider).

The Cupertino company argues that each of the big three banks (Commonwealth Bank, National Australia Bank (NAB) and Westpac) have resisted "serious engagement" with Apple on Apple Pay for the past two years.

Apple claims that they have tried and failed to negotiate with all of the banks, save for one bank who refuses to sign a confidentiality agreement that would allow Apple to send over its initial terms. Apple says that collective bargaining would slow negotiations further, dragging the collective to the level of the least willing member.

The collective, Apple argues, means that each of the banks has no fear of its competitors offering Apple Pay. Thus, the banks wouldn't fear a potential loss of consumers over the feature. This harms consumers by avoiding competitive dynamics, according to Apple.

The move would also stifle innovation in mobile payments, erasing incentives for existing players in Australia to build on top of or compete with Apple Pay. However, a spokesman for the banks told AppleInsider that they, alongside Australia's merchants and payment processors, have been working on contactless payments before Apple Pay.

The banks say that, unlike Android or Samsung, Apple blocks access to NFC payments and "wants to leave users with no choice but to use Apple Pay." They want to negotiate with Apple to offer other integrated wallets within Apple Pay. Last week, Australia's retailers and payment processors sided with the banks to collectively negotiate.

Apple's submission comes 10 days after the ACCC denied interim approval of the collective negotiations. The banks first issued their joint application in late July. The ACCC will make a final decision in October. Most recently, Australian bank ANZ expanded support for Apple Pay to MasterCard, adding to the already-supported Visa and American Express.

Article Link: Apple Says Australian Banks' Apple Pay Challenge Harms Consumers

 

[eddieaus]

In this case I'd rather see Australian banks win. Australian economy is stronger when the banks are doing well. Plus Apple has been dodging tax in Australia for years.

 

[Speedy Dingo]

Sure, Android Pay (Google's mobile pay service) takes a cut as well, but banks have access to NFC hardware on Android phones and can implement it into their own mobile pay apps. Android let's you set the preferred default app for NFC payments

Thanks for clearing that up.

Another question. If 3rd parties like banks can use their own apps to access the NFC hardware on Android, are there any drawbacks to that, security wise?

 

[Konsumerau]

No, it isn't, which is why several banks have applied for government permission to collectively negotiate.



Banks do not pay a fee for supprting Android Pay (ref WSJ). Google reportedly tried for one at first, though.

OTOH, Samsung didn't ask for a fee for Samsung Pay. They see it as just another feature to sell phones, not as an external revenue stream like Apple does.

The problem is even though Samsung and Android Pay are available in Australia and don't take a fee the big 3 CBA, Westpack and NAB will not support the native system. I have asked when is it coming and they say they have no plans at the moment and they make you download their app which are terrible and not updated regularly look at the app reviews. So them saying they want customers to have choice is BS they just want to lock you into their app. I prefer the customer decide native app or bank app give us choice. I think Apple should say ok we will give you access to the NFC but you also have to support our systems and let the users decide.

 

[SurferPup]

Since American Express adopted Apple Pay in Australia I use my Apple Watch where ever I can as it is so easy and fun to use. I've accepted that my bank won't be accepting Apple Pay anytime soon so they are already losing business to American Express and Apple. What the other three major banks are not considering is the psychology of people's payment habits. As consumers change and become use to a new payment technology like Apple Pay it becomes so ingrained that when CBA, WBC and NAB do eventually commit to Apply Pay, it will be hard for them to win that business back. Australians like myself that already use Apple Pay will have American Express as their first card saved and one day my bank's card will the the second card - which card do you think I will use by default?

 

[Loramarthalas]

There is no one less qualified to pass judgement on what's harmful to consumers than a government.

This is about the most idiotic thing I've ever read. Is it some sort of Republican 'government is the problem' stance? Because, if you like, we could do away with government regulation altogether. We'll let oligopolies like banking and infrastructure cartels collude and force prices up, without any competition to drive them down. We'll scrap patents, copyright, and other research-protecting laws that give companies a return on their investment. Hell, we'll even get rid of banking regulations that prevent GFC style global meltdowns. Would you like that?

 

[Sparty93]

Both Apple and the banks are acting fairly arrogantly. As many other Australians have pointed out in in other thread about this, in Australia we have had NFC card for awhile now. In the US NFC payments are new, so for many people ApplePay will be their first experience of NFC payment. In Australia the whole NFC infrastructure existed pre ApplePay and worked well. Apple then comes to Australia and arrogantly expects to be able implement ApplePay here, the way they did in he US with a similar cut for them. I think Apple almost see themselves as a saviour, bringing a great NFC payment system to consumers and merchants. Australia has far less need for a revolutionary NFC payment system than the US.

If I were running one the big banks, I would run a high profile campaign that you can pay with you Android phone.

I see it exactly the opposite. Due to the incredible penetration of contactless payments in AU, ApplePay is an great service for Australians that want it. ApplePay actually does nothing to help banks implement NFC, that's not the point. Since the banks and merchants in AU have invested in contactless payment systems and merchant terminals, ApplePay can come into that Market and give users the choice to pay with a phone or watch. It is just another option. Apple should be applauded for using an industry standard to interact with the banks, merchants, schemes, etc. Totally standards based and the exact reason the AU banks should be glad major tech companies are leveraging that investment by making phones that have NFC in the first place.

ANZ for instance now supports - ApplePay, AndroidPay, and has its own NFC payment wallet in its own GoMoney app for Android. The customer gets whatever they want. And if customers want an ANZ GoMoney app with NFC on their iPhone (which of course does not exist), they can always ditch the iPhone and go to Android. Apple loses in this case.

Apple should be able to do whatever it wants with its hardware (they certainly don't have a monopoly in phones). Can't see any upside for the banks. Keep in mind if customers don't use ApplePay, the banks pay nothing - it's transactional. Customers use it like crazy and everyone is making money (and customers are happy). There are lots of parties sharing interchange fees already. This is completely normal for banks, schemes (visa, MC, etc.), issuers, acquiring banks and so on to take a cut of the fees. Been going on for decades. Not really sure what NAB, WestPac, ComBank are thinking. Obviously ANZ came to a different conclusion (and most other banks around the world) and now I use my Apple Watch for more small transactions than I did with a card. More fees for everyone.

Also (and I know this is getting long), APRA is working with he banks to rollout a new real time payment service in AU called NPP (New Payments Platform) in 2017. A major concept of this real time payment infrastructure is something called an overlay service. Basically, the banks and payment industry in AU lays the plumbing for real time payments, then banks, companies, etc. can offer unique services that ride on top of that service as an "overlay". ApplePay is essentially an overlay on top of the NFC infrastructure in AU. The NPP overlay is embraced by the AU banks and being pushed by the regulator (APRA). I don't see how the banks have a chance in hell of wining the right to boycott and negotiate together. APRA won't like that one bit and sets a bad precedent for NPP overlay services (which is a big deal).

 

[nextuser]

One way or another the consumer is going to lose. Either Apple wins or the banks win, but in the end, the consumer will lose.

 

[Sparty93]

Take a step back. You are paying for NFC hardware in a device ....and you don't believe you have right to use that hardware , and that hardware should be only used so apple can ransom it for Apple Pay purposes?

Can you imagine any NFC benfits with the iPhone. I'm happy for governments to break the ApplePay monopoly on iPhones, so I can access the features of NFC. You can continue to use Apple Pay.....you have a choice , why can the rest of us not get a choice?

You can't have a monopoly of your own services. There are tons of options if you want access to an NFC chip. Also, third party developers are locked out of hardware all the time on Android phones (Samsung's new iris scanner, external memory, direct access to some radios, registers on processors, etc.). In fact just about everything on Android and iOS is accessed via APIs and those APIs have limitations, restrictions, etc. Many of these restrictions are for security purposes on both platforms. TouchID was not accessible on iOS for two years and then Apple opened it up once they felt they had the APIs, security, architecture, documentation to a level that would keep a good user experience (really almost all new hardware in phones is like this and I am glad - I don't want to wait for the development of public API's and documentation before a company can make hardware available). No money or interchange fees involved there. I would not be surprised if the NFC chip is opened up on iOS in a year or so. Point is, I sure want Apple (and Samsung, Motorola, etc.) to make those decisions and not some external regulatory body.

 

[Sandybox]

I'd rather have Apple in charge of my personal life than my bank.

Excellent idea, at least every six months or so they would make me thinner.......