Apple Pay

Australian Banks Refocus Apple Pay Collective Bargaining Request

Will Apple Pay Pay Off in the Land Down Under?

The war between Australia’s biggest banks and the planet’s biggest company is rolling on — albeit with a slightly different focus going forward.

Instead of focusing on the fees Apple charges to access its payments platform, the four biggest banks down under are instead asking the nation’s financial regulator to allow them to collectively bargain with Apple with an eye toward gaining access to the company’s contactless payment function.

The four banks pursuing the action — Commonwealth Bank of Australia, Westpac Banking Corp, National Australia Bank Ltd (NAB.AX) and Bendigo & Adelaide Bank Ltd — collectively control two-thirds of Australia’s credit card market and will not let their cards be provisioned in the Apple wallet.

Under the law, the four banks cannot work together without the approval of regulatory authorities — as bargaining cartels can only be formed with such permission. The operating theory is that a cartel makes the banks more able to negotiate with Apple. Apple charges issuers a fee for transactions made using Apple Pay — and does not allow firms with their own mobile wallets to access the NFC capabilities within the iPhone (which would theoretically allow banks to skip Apple fees and engage with their own apps more directly.)

In the banks’ initial application lodged in July, they sought to negotiate with Apple over fees as well as access to the contactless payments function — though as of last November, the application looked like it was heading for denial.

ACCC Chairman Rod Sims noted that a complaint over fees was unlikely to be successful — but that the issues around Apple’s contactless payment technology might prove winnable for the banks. Unsurprisingly, as of this week, banks have narrowed their focus accordingly.

“It is about the consumer having the choice of multiple wallets,” said Lance Blockley, a spokesman for the banks.

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