Australian Bank Cartel Loses Fight vs Apple in Mobile Wallet Brawl

The Australian competition regulator, the Australian Competition and Consumer Commission, has denied authorisation for the banks to collectively negotiate with Apple over access to the iPhone’s NFC controller and to boycott Apple Pay (via AFR).

Australia’s four major banks, Commonwealth Bank of Australia, Westpac Banking Corporation, National Australia Bank, and Bendigo and Adelaide Bank, had asked the ACCC to allow them to form a bloc, which would give them the most bargaining power in their negotiations with Apple. The banks wanted access to the NFC controller with their own digital wallets. But that’s not something Apple has done anywhere in the world where it has launched Apple Pay.

The ACCC handed down the ruling today, denying the bank’s request. ACCC chairman Rod Sims argued that by allowing the banks to negotiate as a bloc is “likely to reduce or distort competition in a number of markets.”

The ruling is significant because Apple controls a big chunk of the Australian mobile market. The banks have developed their mobile payments service for Android smartphones, but due to Apple’s NFC chip policy, the only way to enable mobile payments on iPhones is by signing up for Apple Pay. The banks wanted to avoid that by forcing the regulator’s hand to crack open the NFC chip in iPhones so that banks can launch their own mobile payments services on iPhones.

That just wasn’t meant to be. The ACCC rejected their request, so they have to play according to Apple’s rules if they want iPhone users to use their cards.

Apple, of course, is pleased with the ACCC’s decision. In a statement sent to AFR, an Apple spokesperson said:

We believe the ACCC’s decision is great for Australians who want the easiest, most secure and private payment experience possible with Apple Pay. Today, millions of users from 3,500 banks in 15 markets enjoy using Apple Pay and we look forward to continuing to work with individual banks in Australia and around the world to bring Apple Pay to their customers too,” an Apple spokesperson said.

So, in the end, this buzz around Apple’s NFC policy plays well for the iPhone maker: It sends a clear message to any banks with similar thoughts that they don’t have a chance. If they want their customers to use their services on the iPhone, the only way is by signing up for Apple Pay.