Business

Apple Pay stoush: Banks focus efforts on getting iPhone NFC access

Apple Pay stoush: Banks focus efforts on getting iPhone NFC access

The group of Australian banks arguing for the right to collectively negotiate with Apple over the introduction of Apple Pay in the country have dropped their request to jointly arrange how to "pass-through" additional fees Apple imposes on its mobile payment service, and will now focus exclusively on gaining access to the NFC functionality within the iPhone.

In a statement, the banks explained that they have narrowed their argument to having access to Apple Pay as it's the more pressing issue.

The banks have scrapped all of their previous complaints about transaction fees but still want full access to the NFC (near field communications) antenna in the iPhone which interacts with contactless payment systems.

"Given that Apple can't actually make a payment without using the banks' infrastructure, it seems to me a reasonable piece of reciprocity for Apple to actually open up their infrastructure to the banks, in exchange for the banks opening up the infrastructure for them".

Up until this point, Australian banks have been using two points against Apple, one that Apple is charging high fees for use with their service, and the other is that banks want access to the NFC chip to implement it in their apps. Apple's VP went on to say that Apple is so confident of the supremacy of its payments system that "customers will say they are happy to switch banks to use it".

In a submission to the competition regulator on January 31, Apple said there were no public benefits to providing the banks access to its contactless payment system, and that doing so would give them a "free-ride" on Apple's investment in technology.

The latest submission from both the banking cartel and Apple is in response to a draft determination handed down by the ACCC in November that moved to deny the banks collective bargaining rights against the iPhone maker.

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"The applicants flatly reject Apple's unsupported assertions that the application is about an objection to the fees that Apple wishes to impose, rather than NFC access".

The major Australian banks and Apple got into loggerheads previous year and the battle still continues. "The ACCC is not now satisfied that the likely benefits from the proposed conduct outweigh the likely detriments", ACCC chairman Rod Sims said at the time. The banks and retailers argue this restricts consumer choice, and prevents them from offering compelling "digital wallets".

Banks caught up in a public brawl with Apple over digital payments have softened their negotiating position slightly, in the hope of convincing the competition watchdog to change its mind in their favour.

"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".

iPhone users can use Apple Pay to register credit cards, and making payments by swiping the devices over contactless payment terminals.

Unlike Android phones, iPhones allow only the manufacturer's system, Apple Pay, to access the NFC component. Particularly in a relatively small market like Australia, the banks said that larger addressable market provided by NFC access on the iPhone platform increases the incentives to invest, and would reduce the cost and risk of failure and enhance the likely chances of success.


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