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No agreement between big banks and Apple Pay

Apple Pay out of reach
Apple Pay: ACCC decides not to grant big banks authority to collectively bargain with Apple


The Australian Competition and Consumer Commission has decided not to grant Commonwealth Bank, Westpac and NAB interim approval to collectively bargain with Apple over its mobile payment service, Apple Pay.

The banks and other card issuers are seeking authorisation to collectively negotiate on issues including the ability to use Near Field Communication (NFC) on Apple devices to enable contactless payments to be made through the banks' own digital wallets.

Apple Pay, which allows consumers to tap and pay using their phone, is a closed system and does not connect with the systems of other providers. That has become a sticking point with the banks, which have been developing their own 'e-wallet' offerings that Apple is refusing to accept.

Banks charge over $3 billion in fees each year for processing credit and debit card transactions.

In its decision, the ACCC said it took into account the potential for continuing effects on competition in the market, and any possible harm to the applicants or other parties.

"Given the complexity of the issues and the limited time available, the ACCC has decided not to grant interim authorisation at this time," said chairman Rod Sims. "The decision is not indicative of whether or not a draft or final authorisation will be granted."

"The ACCC requires more time to consult and consider the views of industry, consumers, and other interested parties."

The Commission said it expects a draft decision to be released in October 2016. The only member of the Big Four not part of the application is ANZ, which broke away and reached a separate deal with Apple.

Apple was approached for comment but declined, pointing the ABC to its submission to the ACCC made earlier in August against interim authorisation.

In that submission, Apple said the banks' request would "harm consumers, lead to less competition and less innovation, and create a troubling precedent".

"Apple upholds very high security standards for our customers when they use Apple devices to make payments. Providing simple access to the NFC antenna by banking applications would fundamentally diminish the high level of security Apple aims to have on our devices," the submission stated.

A spokesperson on behalf of the applicant banks, which also includes Bendigo and Adelaide Bank, said they would continue to be in consultation with the ACCC up until the final determination is made.

"This application seeks to ensure that Australian customers are able to choose between different mobile wallets to make payments easily," the spokesperson said.

"A number of other Australian institutions have supported the ACCC granting authorisation including Heritage Bank, Tyro and Indue."