Australian Banks Denied Request to Negotiate Over Apple Pay

[MacRumors]

An Australian antitrust regulator has denied a request from three of the country's biggest banks to collectively negotiate a deal with Apple over the use of third-party digital wallet software on its iPhones (via AppleInsider).

Last month, Commonwealth Bank, National Australia Bank (NAB), and Westpac lodged a joint application with the Australian Competition & Consumer Commission (ACCC) to negotiate with Apple over gaining access to its NFC-based mobile payment technology, having so far resisted signing deals to use Apple Pay.

Apple strongly criticized the attempt to negotiate a deal over access to its payment hardware, claiming it would compromise security and dent innovation, and the company asked the ACCC to take the full six-month statutory period to assess the application more thoroughly.

Apple will be encouraged to learn that on Friday the ACCC decided not to grant the banks' request during this early stage of its assessment process. ACCC chairman Rod Sims said in a statement that the commission requires more time to consult and consider the views of all the parties involved and other interested parties.

The entire ACCC authorization process usually takes up to six months, including the release of a draft decision for consultation before making a final decision. We expect to release a draft decision in October 2016. The ACCC's decision not to grant interim authorization at this time is not indicative of whether or not a draft or final authorization will be granted.

Last week, Apple lambasted the banks for asking the ACCC for an interim authorization, which would have allowed them to collectively boycott Apple Pay while the negotiations took place.

"These banks want to maintain complete control over their customers. The present application is only the latest tactic employed by these competing banks to blunt Apple's entry into the Australian market," the company wrote in a three-page submission to the ACCC. "In Apple's view, interim authorization of the cartel by the ACCC should be refused."

ANZ is the only bank in Australia's "Big Four" that played no part in the original joint application and has agreed to allow its cards to be used via Apple Pay.

ANZ reportedly gave up some of its interchange fee to Apple as part of the deal, but the other big banks appear unwilling to forfeit the millions of dollars they would have earned through the fees.

Article Link: Australian Banks Denied Request to Negotiate Over Apple Pay

 

[oldmacs]

I hate the Australian banks, but its hilarious, Apple is just as greedy as the banks are in this case.

 

[thekeyring]

Frustrating. Apple want users to have Apple Pay. Are competitors making this much fuss about their mobile wallets in Australia? No, but if the banks do open up and allow NFC based payment systems, Apple competitors can step in without much effort and say "Apple Pay isn't special, you can use (inset name here) as well!"

 

[oldmacs]

Frustrating. Apple want users to have Apple Pay. Are competitors making this much fuss about their mobile wallets in Australia? No, but if the banks do open up and allow NFC based payment systems, Apple competitors can step in without much effort and say "Apple Pay isn't special, you can use (inset name here) as well!"

I'm with the commonwealth bank, and if your Android phone has NFC, you can pay with your phone. Apple doesn't allow that unfortunately, banks have to sign up to Apple Pay and pay a percentage of each transaction or whatever it is. Apple doesn't want to allow NFC access as that means the banks don't pay the money for apple pay, and the banks don't want to use Apple pay as it means paying money to Apple. Both Apple and the Banks are to blame.

 

[2010mini]

I'm with the commonwealth bank, and if your Android phone has NFC, you can pay with your phone. Apple doesn't allow that unfortunately, banks have to sign up to Apple Pay and pay a percentage of each transaction or whatever it is. Apple doesn't want to allow NFC access as that means the banks don't pay the money for apple pay, and the banks don't want to use Apple pay as it means paying money to Apple. Both Apple and the Banks are to blame.

The banks are short sided. Any fee they pay is minimal compared to how much they will make by promoting Apple users to use their credit card via Apple Pay. They get a fee from the retailers anyway so what's the big brouhaha?

 

[djcerla]

I hate the Australian banks, but its hilarious, Apple is just as greedy as the banks are in this case.

How is "greedy"?

Apple offer a bullet-proof service deeply rooted in the hardware they sell, can Aussie banks claim a similar degree of security and ease of use?

 

[oldmacs]

The banks are short sided. Any fee they pay is minimal compared to how much they will make by promoting Apple users to use their credit card via Apple Pay. They get a fee from the retailers anyway so what's the big brouhaha?

Apple is just as bad denying use of the NFC through the bank's apps. This situation only exists because the banks want to keep their money and and Apple wants to make more.

I really doubt people are going to spend more just because they have Apple pay.

 

[cocotutch]

GOOD.

I'm from Australia, and I can tell you this; our banks are more-often-than-not completely useless. Not many people know that when Apple Pay was announced, and subsequently Android Pay, all of our banks' PR teams seemed to confirm over Facebook and Twitter that their "own mobile wallet solution is in the works."

This understandably made most of the country angry, and a staggeringly vast amount of hatred was directed at each of them on various social media outlets and (I'm assuming) in snail mail. Commonwealth Bank (known colloquially as "Commbank") happens to be one of the worst offenders, having MANDATED customers' iPhones have an NFC compatible sticker on the back, which gets touched to the reader when you wish to make a payment. Of course to use this feature you need to have their app open, which is terribly written, glitches frequently and at least for me, forgets that one of my accounts exists at least once a fortnight. The same goes for Android phones except you can use the chip, but all payments MUST be processed through the app.

I was utterly blown away by ANZ's decision to adopt Apple Pay (and more recently Android Pay). The day it was announced, I swear you could've stuck your head out a window and heard the sound of nerds everywhere signing up for ANZ accounts. It was a beautiful day. Since then, customers of other banks have been getting increasingly bitter over the continued absence of Apple and Android Pay. Both services are wanted by customers in Australia, yet the fat cats running the banks are too busy lining their own pockets--not a joke, our bank CEOs take a stupidly large salary--to even for a nanosecond consider the wants and needs of the people. It's been like this for years. It's any wonder really why they're fighting this; they don't want to lose a cent of that fee revenue.

As an Australian, I applaud the ACCC's initial decision. But sadly they can be bullied into submission, and are quite frequently. The banks as good as said they'd keep fighting it until they win, but from experience we know Apple won't fold.

All that said, ANZ's membership has been apparently increasing exponentially. It's sad that the rest of the banks are gonna let this happen, and not capitalise on the monumental opportunity of adopting Apple and Android Pay.

 

[oldmacs]

How is "greedy"?

Apple offer a bullet-proof service deeply rooted in the hardware they sell, can Aussie banks claim a similar degree of security and ease of use?

If it wasn't a move of greed, Apple would let the banks use the NFC chip for their own apps, and allow the banks to use Apple Pay as well, or Apple would offer Apple pay with no fee, but they do neither as that would remove revenue.

Both the banks and Apple are being greedy. In the end as an Australian I loose out. Apple won't let me use the actually quite good Combank app to pay for things like you can on Samsung, and the banks won't sign up for Apple pay.

 

[sshambles]

HAHAHAHAHAHAHAHAHAHAHAHAHA Good.

The less power to the banks, the better!

 

[kas23]

From a consumer standpoint (which is usually totally ignored in situations like this), this is a whole bunch of nothing. Apple Pay isn't all that. It's hard to keep track of places that accept it. But every store accepts credit cards.

 

[Three141]

"These banks want to maintain complete control over their customers"

This statement makes me laugh both are as bad as each other.

 

[oldmacs]

"These banks want to maintain complete control over their customers"

This statement makes me laugh both are as bad as each other.

I know, how hypocritical.

 

[S.B.G]

"These banks want to maintain complete control over their customers.

Just as Apple wants to maintain control of its customers and subsequently its Apple Pay service.

 

[WiseAJ]

Apple is just as bad denying use of the NFC through the bank's apps. This situation only exists because the banks want to keep their money and and Apple wants to make more.

I really doubt people are going to spend more just because they have Apple pay.

Banks want to profit off of people using a secure payment feature that APPLE developed and maintains that they had no part in. Apple doesn't want the whole piece of the interchange fee pie, just a small piece when their secure payment technology that they spent time and money developing is used.

If they want access to the secure NFC for their apps then they should have to pay something. Nothing in this world is truly free. Name an absorbantly high yearly/monthly fee and they'll step in line to a significantly lower Apple Pay fee system that only comes in to play when it is used.

 

[dave2010]

How is "greedy"?

Apple offer a bullet-proof service deeply rooted in the hardware they sell, can Aussie banks claim a similar degree of security and ease of use?

Using a fingerprint on your phone to secure a piddling $100 or so is overkill. The existing contactless system that is very commonly used now is fine.

 

[smacrumon]

Looks like the big banks can't handle the treatment they themselves inflict on their own customers every day.

 

[BBCWatcher]

The headline ("Australian Banks Denied Request to Negotiate Over Apple Pay") is misleading or even inaccurate. All the ACCC did was deny the three Australian banks' request for a quick decision. But the ACCC didn't make any decision except a decision on how quickly they'd decide. An accurate headline would be "Delayed Decision on Australian Banks' Apple Pay Complaint."

I read the headline and thought, "Well, that was remarkably fast." No, it really wasn't. The only news is that there is no fast news.

 

[2010mini]

Apple is just as bad denying use of the NFC through the bank's apps. This situation only exists because the banks want to keep their money and and Apple wants to make more.

I really doubt people are going to spend more just because they have Apple pay.

Yet banks here jumped at the chance to get on AP. It's not about spending more. It's about convenience. People use their phones constantly. Being able to snapchat, pay for something and go right back to whatever you were doing is convenient.

 

[oldmacs]

Banks want to profit off of people using a secure payment feature that APPLE developed and maintains that they had no part in. Apple doesn't want the whole piece of the interchange fee pie, just a small piece when their secure payment technology that they spent time and money developing is used.

If they want access to the secure NFC for their apps then they should have to pay something. Nothing in this world is truly free. Name an absorbantly high yearly/monthly fee and they'll step in line to a significantly lower Apple Pay fee system that only comes in to play when it is used.

They should pay a fee to use a chip? Thats crazy.

Apple want to profit off of people using banking systems that the big banks developed, that they had nothing to do with and don't have to maintain. See it works both ways.
[doublepost=1471601223][/doublepost]

Yet banks here jumped at the chance to get on AP. It's not about spending more. It's about convenience. People use their phones constantly. Being able to snapchat, pay for something and go right back to whatever you were doing is convenient.

And if Apple allowed access to the NFC chip, I'd be able to pay with my phone no problem with connivence. Apple just wants to profit off of it, in the same way that the banks want not to pay Apple.

 

[supertomtom]

From a consumer standpoint (which is usually totally ignored in situations like this), this is a whole bunch of nothing. Apple Pay isn't all that. It's hard to keep track of places that accept it. But every store accepts credit cards.

In Australia almost everywhere accept contactless payment. With ANZ (the only one of the four big banks on board) I can use Apple Pay with my ANZ debit and credit card anywhere just like I would with my physical cards. No need to keep track of places that accept it.

(Apple pay with AMEX is a different story tho...not all contactless payment machines take AMEX...which makes it practically useless trying to guess.)

 

[jz-]

The banks are short sided. Any fee they pay is minimal compared to how much they will make by promoting Apple users to use their credit card via Apple Pay. They get a fee from the retailers anyway so what's the big brouhaha?

The issue is that the big banks have far more power than Apple in the payments industry here. A tiny proportion of customers here are willing to switch banks, but it's easy for consumers to keep using PayWave/PayPass.

From a consumer standpoint (which is usually totally ignored in situations like this), this is a whole bunch of nothing. Apple Pay isn't all that. It's hard to keep track of places that accept it. But every store accepts credit cards.

From my experience, Apple Pay can be used basically everywhere in Australia that takes credit cards. It's been over a year since I've come across a store that accepts credit cards but doesn't take contactless payments.

 

[Blahfish]

From a consumer standpoint (which is usually totally ignored in situations like this), this is a whole bunch of nothing. Apple Pay isn't all that. It's hard to keep track of places that accept it. But every store accepts credit cards.

Tap-and-go, PayPass, PayWave have been in Australia long before Apple debuted Apple Pay in the US!

Most EFTPOS machines down here accept NFC payments. Since I got Apple Pay through the ANZ Bank I've used it exclusively and only had it reject once!

I think it is 'all that'! I pretty much don't carry a wallet any more(my license lives in my phone case), and the fact that I'm not limited to the usual $100 Tap-and-go limit.

 

[fermat-au]

Many shops in Australia have a minimum to use EFTPOS and some have a surcharge for Amex. Could the backs say to consumer that only some credit cards can be used with Apple Pay, then charge the the user "Apple Tax" via a high annual fee?

It is my understanding now the Australian back kind of do this, you can add Amex to Apple Pay, not other cards.

 

[2010mini]

They should pay a fee to use a chip? Thats crazy.

Apple want to profit off of people using banking systems that the big banks developed, that they had nothing to do with and don't have to maintain. See it works both ways.
[doublepost=1471601223][/doublepost]

And if Apple allowed access to the NFC chip, I'd be able to pay with my phone no problem with connivence. Apple just wants to profit off of it, in the same way that the banks want not to pay Apple.

It's more than "just a chip."

Apple paid to develop this software and security that goes with it. Should they be forced to give access to their proprietary hardware/software? If the banks are being so unfairly treated by apple... They are free to go develop their own mobile device and payment options. No one is forced to use AP or Support AP.