Apple and the Banks Appeal to Regulators in Down Under Brawl

  • Philip Ryan
  • August 18, 2016
  • 2

© Can Stock Photo Inc. / kwiktorApple and three of Australia’s Big Four banks are fighting about mobile payments — and both sides are appealing to regulators for help.

National Australia Bank, Commonwealth Bank of Australia and Westpac have united to fight the Cupertino, Calif.-based giant — which is bigger than all of them combined. Australia and New Zealand Banking Group, the fourth of the Big Four, is not part of this group, and has enabled Apple Pay, which launched down under in April. It was followed in short order by Samsung Pay and Android Pay. 28 banks already offer Android Pay.

At issue is the fee Apple charges to banks, as well as the use of the NFC (near-field communication) transmitter, the use of which Apple restricts. The issues are related — the banks want to use the transmitter without paying Apple the fee and play by Apple’s rules. The banks say Apple’s restrictions stifle competition and limits innovation. The banks would like to launch their own wallets using NFC, but Apple will not allow them access — yet. Brian Roemmele, CEO of PayFinders, told Bank Innovation that Apple will eventually open up NFC to the banks.

Apple’s iOS has around 42% of the smartphone marketshare in Australia. Apple Pay could have a significant impact in Australia, where tap-and-go card payments account for 70% of POS card transactions.

The banks have asked the Australian Competition and Consumer Commission (ACCC) to give them permission to negotiate as a single body. Apple is also appealing to the ACCC, saying that allowing the banks to form a “cartel” sets a “troubling precedent.” Apple claims users’ security would be compromised, but another problem would be that banks across the globe could then ask for the same thing.

Even if the banks are able to collectively bargain, they are cumulatively smaller than Apple and are unlikely to budge the giant corporation. Credit card interest rates average about 20% down under, so the banks have large margins to protect. Canada’s Big Six banks similarly dragged their feet before ultimately capitulating.

Apple typically makes deals only with the top few banks in each market, then relies on deals with the networks for smaller players. It is due to renew its deals in the U.S., its inaugural market, in 2017.

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Philip Ryan is Senior Editor of Bank Innovation and Senior Director of INV Fintech. He began covering financial services in 2012 and has more than 15 years' experience in online journalism. He can be reached at

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