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Aussie Banks Hit Back at Apple Over Mobile Payment Dispute

14 February 2017

They say that without open NFC access on iPhone, no genuine competition in the provision of mobile wallets is possible and Apple will have a stranglehold on this strategically important future market. In the new application, the banks made a decision to eliminate arguments over fees and any other items "the ACCC considered may lead to a public detriment".

The banks had in a statement issued ahead of a final decision from ACCC, said they had chose to narrow the application to mainly focus on contactless payments and cut the collective bargaining authorization term to 18 months.

In its latest response [PDF], the banking cartel has reiterated its long-held opinion that the public will benefit if Apple is forced to hand over its NFC hardware, highlighting it would increase competition and consumer choice in digital wallets in Australia, increase innovation and investment in digital wallets and other mobile applications using NFC technology, provide greater consumer confidence leading to increased adoption of mobile payment technology in Australia, and provide cost-based benefits for consumers. A cartel would strengthen the banks in negotiating the ability to offer their own digital wallets for Apple's iPhones - the first major challenge to Apple Pay of its kind globally.

"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 banks also dismiss Apple's theory that they are using fees on Apple Pay transactions as a "trojan horse" to discourage the use of the service as "fantasy".

The banks are seeking permission from the Australian competition regulator to allow a collective bargaining agreement with Apple allowing removal of fees charged by Apple Inc.as a bone of contention. "This has global implications for the use of NFC on smartphones".

"The application seeks permission to jointly negotiate with Apple; this is not an attempt to delay Apple Pay from entering the Australian market".

"All the banks are asking for is for the NFC to be opened up, or the antenna to be opened up on the Apple phones", Bendigo and Adelaide bank's managing director Mike Hirst told investors during the bank's 2017 interim results earnings call.

"Apple is not a bank or a credit card scheme, and Apple can not on their own complete a mobile payment, Blockley continues. Nor are the applicants manufacturers of mobile phones - both parties need each other to bring strong mobile payment offerings to the market".

According to Blockley, who spoke on behalf of the banks, the NFC-targeted application is not an attempt to delay Apple Pay's wider support in Australia as it would be offered alongside other mobile wallets - similar to how Android supports open access to the NFC function.

The ACCC is expected to deliver its full decision next month. NFC technology is inside every modern smartphone, and all contactless capable credit and debit cards. It allows making payments on mobiles and helps in the pairing of devices and information exchange.

Apple has said that even if the ACCC grants the banks' application it will not offer open slather access to the iPhone's NFC capabilities.

"If the customers ultimately prefer to use the Apple Pay wallet they can".

Aussie Banks Hit Back at Apple Over Mobile Payment Dispute