Macquarie Bank and ING Direct to launch Apple Pay in February
Apple reveals new partnerships and accuses remaining big banks of risking their place in the future of digital wallets.
The global head of Apple Pay Jennifer Bailey confirmed new partnerships with Macquarie Bank and ING Direct in an interview with the AFR this week. As of February, Macquarie and ING will join 44 other small banks who pay Apple a fee to use its digital wallet.
However, ANZ is still the only bank out of the Big Four which offers Apple Pay. Bailey accused banks that are resisting Apple Pay of failing to act in the best interest of their customers. In particular, Bailey targeted Commonwealth Bank, National Australia Bank, Westpac, Bendigo and Adelaide Bank, a group which collectively control two-thirds of Australian cardholders.
Despite this resistance, Apple is confident in Apple Pay’s position as a dominant leader in mobile payments. Bailey says that customers are willing to move to another bank in order to use Apple Pay, meaning the remaining big four and other institutions are at risk of losing customers by refusing to work with Apple.
Bailey also said that the banks’ application to the Australian Competition and Consumer Commission to increase their bargaining leverage shows a lack of knowledge about how the platform works and Apple’s willingness to work with the banks to offer the digital wallet. The ACCC denied the banks’ application to negotiate collectively in a draft decision in November but is expected to publish the submission responding to the decision in the coming days. The regulator will issue a final decision next month.
Bailey says that many of their partnered banks were hesitant to sign on at first, but are now benefiting from the results of launching Apple Pay. For example, 26% of ANZ customers are currently using Apple Pay and have made more than 10 million transactions since the launch in April 2016. As such, Bailey believes that the banks are risking their futures in digital wallets by failing to collaborate with Apple.
Working with the banks is just one way Apple is planning to monopolise the digital wallet space. In addition to credit and debit cards, Apple also has plans to digitise every element of our physical wallets in the future. This will include loyalty cards, transit cards such as your OPAL card and identification cards.
While Apple Pay is a leader in digital wallet technology in Australia, it's not the only alternative for smartphone users. Android Pay is available with more than 45 banks in Australia and Samsung Pay is available with American Express and Citi. The remaining big four also have their own internal digital wallet apps. For example, NAB recently launched its Android digital wallet, CommBank also has its Tap & Pay system for Android and Westpac customers can tap and go on their Samsung devices with the bank app.
Unfortunately, if you're a loyal Apple user, it might be some time before this digital payment stalemate shifts and you're able to use Apple Pay with the remaining three of the Big Four.