Australian Regulator Rules in Favor of Apple Pay over Banks

An Australian antitrust regulator has preliminarily ruled against several of Australia’s biggest banks, which were seeking the right to bargain collectively with Apple over access to iPhones for their own digital wallets. The banks were hoping to leverage their combined power in Australia where they collectively issue two-thirds of the country’s credit cards into offering their own integrated digital payment apps into iPhones, requiring direct access to the iPhone’s NFC and bypassing Apple Pay. They also sought to remove Apple requirements that any fees Apple charges banks not be passed on to consumers. The Australian Competition and Consumer Commission (ACCC) has denied the Commonwealth Bank of Australia, Westpac Banking Corporation, National Australia Bank, and several smaller banks permission to bargain together with Apple, for the time being.

“This is currently a finely balanced decision. The ACCC is not currently satisfied that the likely benefits from the proposed conduct outweigh the likely detriments,” ACCC Chairman Rod Sims said. “Banks can already offer competing digital wallets on iPhones without direct access to NFC, through their own apps using Apple Pay payment technology, or using NFC tags. Banks can also offer digital wallets on the Android platform. Digital wallets and mobile payments are in their infancy and subject to rapid change. In Australia, consumers are used to making tap-and-go payments with payment cards, which provide a very quick and convenient way to pay. It is therefore uncertain how competition may develop with the availability of mobile payments and possible future innovations.”

ANZ, the fourth of Australia’s big four issuers, did not join its competitors in their appeal to the ACCC and negotiated a deal to author Apple Pay separately.