Apple has argued in a submission to the Australian Competition & Consumers Commission (ACCC) on Monday (Feb. 6) that an industry consortium of Australian banks is trying to delay or prevent Apple Pay from expanding in the country.
According to a report by Bloomberg, Apple raised concerns that banks are aiming to “delay the expansion of Apple Pay,” which it argued hurt consumers, as well as smaller card issuers who can use Apple Pay to take on the bigger banks in the digital payment market. Apple has been in a battle with banks in Australia over whether or not the banks should be able to negotiate together over the rollout of Apple Pay. The banks have invested in their own mobile payment technology and are afraid that they will be shut out of that market, which is fast-growing. As a result, they want to negotiate as a group.
Bloomberg, citing data from Visa, noted Australia is the leader in terms of usage of contactless payment technology. In December, the ACCC issued a draft ruling in which it balked at granting the banks, which include Commonwealth Bank of Australia, National Australia Bank Ltd., Westpac Banking Corp. and Bendigo & Adelaide Bank Ltd, the ability to negotiate as a group. A final ruling is expected to come down in March.
At the heart of the fight is the iPhone’s use of a near-field communications antenna, which makes payments on a contactless reader happen. Apple wants banks to let its customers put their credit card information on Apple’s digital wallet. Banks, on the other hand, want their banking and payment apps to have direct access to the Apple technology. Apple argues that doing that would hurt security and the simplicity of its technology. Apple said in the latest complaint that the banks’ main motivation is to not pay fees to use Apple Pay or to dissuade customers from using it by charging a fee for the service. Apple said in the filing the banks want to be “allowed to continue to free-ride on the significant investments’’ Apple made.