Apple Wins Mobile Wallet Victory in Australia
Apple has scored a big win in Australia for the company’s mobile wallet. That country’s competition regulator has denied a request by big local banks to collectively negotiate over the introduction of Apple Pay there.
The conflict stems from Apple’s policy of not allowing third-party payments apps to be installed on its mobile devices. Three of Australia’s major banks—Commonwealth Bank of Australia, National Australia Bank and Westpac—along with Bendigo and Adelaide Bank, want to offer their own iPhone payment apps that would work through the iPhone’s NFC hardware. The banks in July applied to the Australia Competition and Consumer Commission to collectively negotiate with Apple without violating anti-trust laws.
Apple has argued that maintaining control over the NFC hardware is necessary for security and that providing banks direct access would undermine Apple Pay security. Further, allowing the banks to negotiate collectively would create “a troubling precedent,” in enabling the banks—which Apple called “among the most profitable financial institutions in the world”—to act as a cartel in negotiations.
The banks rejected Apple’s security argument, saying that the company was “seeking for itself the exclusive use of Australia’s existing NFC terminal infrastructure for the making of integrated mobile payments using iOS devices,” according to a filing with the ACCC.
This week, the commission said it was “not satisfied” that the benefits from accepting the banks’ request would outweigh the downsides of reducing competition “between the banks in the supply of mobile payment services for iPhones.”
Apple offered no immediate comment about its next move in Australia, but the company recently said Apple Pay transaction volume increased 500 percent in the company’s fiscal fourth quarter of 2016, compared with the same quarter in 2015. In fact, September brought more mobile transactions via Apple Pay than the whole of 2016, the company said.