Apple will not negotiate with Australia’s biggest banks as a collective whole when it comes to competition, best practice standards, efficiency or transparency. Doing so, Apple contends, runs the risk the firm will “undermine the availability, security, and privacy” its customers expect when using Apple devices to make payments.
Such is the argument Apple has made in its latest submission to the Australian Competition and Consumer Commission (ACCC) in its ongoing battle to prevent Commonwealth Bank of Australia, National Australia Bank, Westpac, and Bendigo and Adelaide Bank from joining forces to collectively negotiate with third-party mobile wallet providers such as Apple.
“If granted, the authorization would harm consumers, lessen competition, and reduce innovation in the banking sector, of which the payments system is a core part. It would also create a troubling precedent. Apple expects that banks and third-party mobile wallet providers will continue innovating and developing new and better solutions,” Apple wrote.
Apple and its payment platform Apple Pay are not a threat to the banks, Apple notes, and instead should be viewed as an innovative competitor who pushes iOS innovators to new heights through competition. Apple argues that giving big banks authorization to collectively bargain will put a “brake on new competition” as it creates unfair local advantages for Apple Pay competitors.
The banks, on the other hand, argue that Apple’s hard refusal to give any payment platform but their own access to the NFC hardware on an iPhone is Apple essentially competing unfairly with the local payments apps that can’t leverage contactless payment except by going through Apple. Apple argues this is necessary for phone security.
“Apple does not provide banks access to the NFC radio because doing so would undermine the security our customers expect when using Apple devices to make payments.”
Apple further argues not giving the banks access to NFC does not prevent the banks from providing alternative payment technologies for their customers.
The banks view the situation with Apple rather differently.
“Apple’s submission to the ACCC makes it clear that Apple does not want to give iPhone users the ability to choose an integrated third party wallet of their own preference. Unlike users of Samsung and Android, Apple is blocking access to the NFC function and wants to leave iPhone users with no choice but to use Apple Pay,” the spokesperson for the banks noted.
“Their submission to the ACCC claims this lack of choice is in the best interest of Australian consumers. The applicants disagree. Instead, they want to negotiate with Apple so there is an opportunity to offer other integrated wallets alongside Apple Pay. They also want to make sure Australian consumers benefit from the same high standards of security and transparency no matter which mobile wallet they choose.”
Apple, shockingly, has an answer for that.
“The applicants rely on innuendo and misstatements to support their application. Most have little direct insight into Apple Pay or Apple’s terms (case in point, one applicant bank has refused to even enter into a confidentiality agreement with Apple to allow for preliminary discussions about the terms under which it would participate in Apple Pay).”
This should end well for all involved.