Apple, Aussie Bank Battle Heats Up Down Under
Apple is pushing back against a bid by a group of Australia’s major banks to be allowed to negotiate collectively with the U.S-based tech giant over contactless payments. In a filing with the Australian Competition and Consumer Commission (ACCC) released Aug. 30, Apple called upon the regulator to reject a request by the banks—Commonwealth Bank of Australia, National Australia Bank, Westpac, and Bendigo and Adelaide Bank—to collectively bargain with Apple in negotiations to offer Apple Pay to their customers. If allowed to band together, the banks would demand that Apple grant direct access to the NFC technology within the iPhone and allow them to charge consumers a fee for using Apple Pay, the company said, citing the banks’ application with the ACCC. If granted, the banks’ request “would harm consumers, lessen competition and reduce innovation in the banking sector,” Apple said in the filing. Such an authorization also “would create a troubling precedent,” in enabling the banks—which Apple called “among the most profitable financial institutions in the world”—to act as a cartel in negotiations.
The banks, which filed their request with the ACCC in July, want to open up the iPhone’s contactless payment technology to their own in-house payment apps without having to go through Apple, as currently required. Apple contends that maintaining control over the NFC hardware is necessary for security and that providing banks direct access “would undermine the security our customers expect when using Apple devices to make payments.” Apple also noted in its filing that the company already has tried unsuccessfully to negotiate with each bank separately.
Earlier this month, the ACCC rejected the banks’ bid for interim authorization of their request, saying it needed more time to consider the matter. A final decision from the commission is due in October.
Meanwhile, Google this week requested that the ACCC probe whether the banks are planning to eventually extend their request to collectively bargain over Google’s Android Pay as well. The company asked the regulator to ensure any collective bargaining rights would not extend to negotiations over Android Pay, which already offers open APIs to third-party developers.
One major Australian bank that has taken a much friendlier stance toward third-party mobile payments is ANZ. The bank on Aug. 30 announced it will extend support for Apple Pay—along with Android Pay—to holders of ANZ-issued Mastercards. The bank began supporting Apple Pay for its American Express– and Visa-branded cards in April. The just-announced Mastercard support opens Apple Pay to 500,000 additional ANZ payments cards, the bank said.