Those looking forward to the day when they can use Apple Pay down under (with a card issued by an Australian bank) may be waiting for a bit longer.
Reports in The Sydney Morning Herald indicate that Australia’s banks are less than wholly enthused to jump on board the Apple Pay bandwagon — despite the fact that issuers in the U.S., U.K. and Canada have elected to do precisely that.
At issue is interchange — specifically, the $0.15 cut of the fees that issuers charge merchants to accept the cards. While interchange is alive and well in the U.S., it is not nearly so popular in the rest of the world, and Australia, like the Eurozone and the U.K., has much, much lower (and legally mandated as such) merchant fees, meaning Apple’s cut would take a much bigger bit out of the bottom line — in Australia’s case, Apple would take about half the fee from their pocket.
It is worth nothing, however, that lower fees than what are charged in the U.S. might well be on the table — as at the time of its U.K. launch, it was noted that U.K. banks aren’t forking over the same fee cut as their American counterparts.
Concerns about cost are only part of the picture in Australia, however. Banks are also unsure if they want to make a bet on Apple at this time, given that the RBA (Reserve Bank of Australia) has already required the banks to contribute hundreds of millions of dollars into the creation of the New Payments Platform, an infrastructure that will have real-time capability. There is concern that Apple is essentially trying to free ride on that development.
There is also a concern that signing on with Apple Pay gives away too much control of the relationship with the customer; by putting their cards behind Apple, banks worry that they are losing opportunities to expand sales and conversion opportunities.
Plus, Apple makes a lot of demands on its partners, The Herald noted, but at this point it is unclear what it gives back to those partners in return, since Apple Pay’s popularity among consumers still leaves much to be desired — fewer than 15 percent of compatible iPhone owners have taken the service for a test drive.
However, there may still be hope for Apple yet in the Outback. The Morning Herald‘s argues that Apple’s best odds for jumping into the Australian market might be through a smaller bank which has more to gain from a relationship with a high-profile player.