Apple has won one of the important global fights in restricting banks from taking control of the Apple Pay Access. A group of Australian banks collaboratively bargained to gain access to Apple Pay so that the banks could use their own wallets in mobile iPhone payments. However, Apple wants to keep its NFC chips private by ensuring that Apple wallet is always used while making payments through iPhone. The Australian Competition and Consumer Commission (ACCC) has taken the side of Apple, rejecting the plea of the banks.
The Apple Pay service is developed based on the Near Field Communication (NFC) technology used in iPhones. NFC is strictly private and no bank in the world has gained access to it. While making payments, iPhone users must always use the Apple Pay service. Google, on the other hand, allows banks to use their digital wallets on android platforms. The Australian banks wanted to avoid the Apple’s transaction fees by using their own banking apps. The banks wanted to engage the customers more and take advantage of the contactless payment market which is estimated to be $84 billion.
Apple has more than 3500 banking partners in about 15 global countries. None of the banks have access to the NFC technology which forms the basis of the payment system. The Australian banks argued that the access is required not to circumvent the transaction fees, but to make the mobile payment platform user-friendly. The ACCC was worried that bargaining power to the banks may reduce a stiff competition between Apple and Google. When the banks collaborate on providing the service, it will reduce the competitiveness in the market as well. The regulator pointed out that the banks didn’t provide sufficient information to support the claim that their action won’t affect the competition in the market.
The Australian authority strongly believes that third party digital wallets such as Apple wallet keep the choices open for customers due to the inherent competition. The regulator is also worried that the move proposed by the banks would result in more NFC controlled smartphones in the future. The banks now can’t collectively negotiate with Apple. However, the banks are free to negotiate with Apple separately to make a deal to gain access to Apple Pay.
The banks are unhappy about ACCC siding with Apple because the ruling will hinder the development of banks specific mobile wallets. In Australia, the move will effectively mean that Australian mobile wallet will be dominated by an overseas organization. The spokesperson for the banks said that the regulator didn’t see the bigger picture here. The banks strive to promote choices for customers by offering different digital wallets. Android users can still use digital wallets of the banks to pay for the services while using their smartphones and iPhone users won’t have the same choice. A spokesperson from Apple has commented that it is best for Australians who want the best and easiest mobile payment experience using their iDevices.