Apple: “Banks are not interested in promoting competition in mobile payments”

Posted: 8 November 2016 8:02 am

The war between Apple, CommBank, NAB and Westpac keeps getting uglier.

This month we should finally see a decision in the Apple Pay Wars. Back in July, a consortium of Australian banks, including three of the big four (CommBank, NAB and Westpac) sought permission from the Australian Competition and Consumer Commission (ACCC) to collectively negotiate with Apple to gain access to both Apple Pay and to the NFC antenna in iPhones for use in their own mobile banking apps.

The ACCC refused to make a fast-tracked decision, Apple said that the banks could not be trusted with security, and the banks confirmed that earlier attempts to also include Google and Samsung weren't relevant - this was indeed a battle with Apple.

Apple's latest submission to the ACCC was made public yesterday, and maintains much the same line of argument. Much of the commercial detail about how banks around the world have taken up has been redacted in the public version, which is irritating but unsurprising.

Three new points are worth noting. Firstly, Apple argues that it would be expensive for it to make any changes to Apple Pay and iOS to enable NFC access, noting that it would "require Apple to invest significant resources to design a platform which it offers nowhere else in the world". This is undoubtedly true, but perhaps not particularly persuasive coming from a company which made US$9 billion in profit in its most recent quarter.

Secondly, Apple notes that banks can in fact access NFC through their own apps on iOS - they just have to do so using Apple Pay as the medium. The Apple-backed approach is "integrating [the bank-created] mobile banking application with Apple Pay to enable to bank to securely route payments through Apple Pay's secure element infrastructure . . . this allows the issuer to provide additional function, such as account balance checking and funds transfers through their own mobile banking applications on iOS devices." What Apple doesn't mention is the key sticking point with that approach: banks would have to pay for such access.

Finally, Apple argues in blunter terms than it has before that the real motivation for the application is to kill off all non-bank competition in the segment:

The only plausible explanation for the applicant banks' behaviour is that they are not interested in promoting competition in mobile payments, but instead would prefer a situation where the only payments apps available to consumers in Australia are the banks' own proprietary apps that only provide access to their own respective credit and debit cards.

As I've noted before, this is about greed in both camps. Apple wants a cut of every payment on its devices; banks want to spend as little as possible for access to them. It seems unlikely the ACCC will grant the banks' wishes, but we'll know soon enough which pigs are going to be allowed to stay at the trough this time around.

Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on

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