Aussie banks give ground in Apple Pay stoush

Aussie banks give ground in Apple Pay stoush

Negotiation will now be in relation to NFC access alone

The Aussie banks butting heads with Apple over its Apple Pay platform have narrowed their request to the Australian competition watchdog for authorisation to collectively negotiate with the tech giant.

In their latest submission to the Australian Competition and Consumer Commission (ACCC), the banks revealed they had removed the request for collective negotiation on the potential to pass-through the fees Apple intends to impose on the payment system to their customers in Australia.

The four banks making the application, Bendigo and Adelaide Bank, Commonwealth Bank of Australia, National Australia Bank, and Westpac, have backed down, limiting their requested collective negotiation authorisation to Near Field Communication (NFC) access alone, and minimising the authorisation term to 18 months – half the original term sought.

The banks have applied to the ACCC for permission to jointly negotiate access to Apple Pay and NFC function on iPhones, saying that it’s now not about Apple’s fees but rather, its access to its NFC technology.

This follows a statement from the banks, on February 7, which said that, “Apple's statement that the application is fundamentally about an objection to the fees that Apple wish to be given rather than NFC access, is incorrect and unsupported”.

In its submission, Apple suggested that the attempt by local banks to collectively negotiate on Apple Pay terms could be viewed as a “Trojan Horse” ploy used to normalise the public’s acceptance of new mobile payment fees.

The applicant banks have since flatly rejected Apple's “unsupported assertions” and have claimed Apple’s “conspiracy theories” about “Trojan horse fees” are a fantasy.

The ACCC then raised these concerns in its draft determination, following which the banks decided to remove from consideration items the ACCC considered may lead to a public detriment.

The debacle has been ongoing since 27 July last year, where these banks asked from ACCC permission to collectively gang up against Apple Pay, fuelled by the fear of missing out on interchange fees as more people begin to pay by tapping their iPhone instead of their bank card.

“The applicants are ready, willing, and able to participate in Apple Pay, alongside being able to offer their customers their own mobile wallet products,” payments specialist and spokesperson on behalf of the applicants, Lance Blockley, said.

“This application has always been about consumer choice, and allowing competition between the makers of mobile wallets to offer the best products and features they can to determine which mobile wallet consumers will use. The applicants want to put up their digital offerings head to head with Apple Pay, and let the market and individual consumers decide which best suits their needs,” he said.

According to Blockley, the application seeks permission to jointly negotiate with Apple and is not an attempt to delay Apple Pay from entering the Australian market.

“The applicants expect that Apple Pay would be offered to their customers alongside open access to the NFC function. Any delay or frustration will be as a result of Apple refusing to negotiate.

“Apple is not a bank or a credit card scheme, and Apple cannot on their own complete a mobile payment. Nor are the applicants manufacturers of mobile phones – both parties need each other to bring strong mobile payment offerings to the market,” Blockley added.

Last week, a report by Reuters stated that Macquarie Group and ING Direct would start using Apple Inc's mobile payment service in Australia this month, joining the Australia and New Zealand Banking Group, which was the only one of the major banks to not call for cartel authorisation and adopt the Apple Pay system.

The ACCC is yet to determine its final decision.

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