Australian Banks Join Forces to Challenge Apple Pay
For the first time globally, a group of financial institutions have turned to a competition regulator to negotiate as a bloc against Apple and called out the iPhone maker’s strategy to lock the embedded chip to Apple’s proprietary services only (via Financial Review).
Three of the four biggest Australian banks — Commonwealth Bank of Australia, National Australia Bank, Westpac Banking Corp — and Bendigo and Adelaide Bank have turned to the Australian Competition and Consumer Commission, asking the regulator to give them permission to collectively negotiate with the iPhone maker.
The ACCC said on Wednesday the banks are seeking authorisation “on behalf of themselves and potentially other credit and debit card issuers to engage in limited collective negotiation with providers of third-party mobile wallet services on conditions relating to competition, best practice standards, and efficiency and transparency”.
What they hope to do is convince Apple to open up its NFC API to third-party financial services, granting these banks access to the NFC antenna. As a result the banks would be able to load their mobile wallets on iPhones. Currently these mobile payments services developed by the Australian banks (and other financial institutions worldwide) — often as part of their mobile banking apps — are limited to Android smartphones, while their iOS app is limited to mobile banking services.
CBA has developed a workaround: it has asked iPhone users to use a sticker on the back of their handsets which will act as an antenna. This solutions has not been too popular among users. In other countries, financial institutions have developed a solution that uses beacons for mobile payments.
The Australian banks have asked the competition regulator to provide interim authorization for the negotiations with Apple and consider them urgent, as the Transport for NSW will trial contactless payments on the NSW transport system.
It remains to be seen how Apple will react to this “call for a boycott”, although Apple’s position is pretty clear at this point: it will not open its NFC chip to third-party services.