Australian banks eliminate fee demands, focus legal assault on opening up Apple Pay NFC te...

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in Apple Watch
The four Australian banks at the core of the ongoing debate about opening up Apple Pay in the country have narrowed down their demands after being snubbed by the country's competition regulator, and are now solely focusing on opening access to iPhone and Apple Watch NFC technology.




Bendigo and Adelaide Bank, Commonwealth Bank of Australia, National Australia Bank, and Westpac have dropped fee negotiations, saying that access to core Apple Pay NFC technology would benefit retailers, boost loyalty programs, and enhance touchless payments as a whole. The banks believe that there is "no genuine competition" in Australia, leaving Apple with a "stranglehold" on the marketplace, should it be allowed to bring a closed system to the country's banks.

"Open access to the NFC function, as occurs on the world's most popular and widely installed mobile operating system Android, is important not just to the applicants and mobile payments, but to a range of NFC-powered functions across many sectors and uses," said the bank's collective spokesman Lance Blockley in a statement. "This has global implications for the use of NFC on smart phones.

"The applicants expect that Apple Pay would be offered to their customers alongside open access to the NFC function," added Blockley. "Any delay or frustration will be as a result of Apple refusing to negotiate."

The four banks last year filed a complaint with the Australian Competition and Consumer Commission (ACCC), asking to collectively negotiate for access to the same NFC technology Apple Pay uses. Although a final ruling isn't likely until March at the earliest, a draft decision appears to have already shot down the idea.

Only one major national bank, ANZ, currently supports Apple Pay in Australia. Alternatives from international firms ING and Macquarie are also available in the country.

Apple has insisted that allowing third-party access to its NFC technology would compromise security, and that device owners would have to manually pick which app uses the chip anyway, potentially reducing adoption. On Friday, Apple Vice President Jennifer Bailey decried the legal maneuvering.

"While initially, in many markets, there have been banks that have initially been wary about working with a company as large as Apple, once they begin to work with us and understand the Apple Pay platform, they see the benefits of it," Bailey said. "That hasn't fully happened with the ACCC applicants, because the conversation is happening through the ACCC process, compared to what normally happens, which is we have the conversation bilaterally."

Bailey noted that Australians are using Apple Pay more often each month than customers in any other country, credited to "Australia being a recognized global leader in contactless payments and usage." Over 26 percent of ANZ customers are using the platform.
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Comments

  • Reply 1 of 30
    My friend who is living in Australia said that he got an Android becauae of the contactless payment system that his bank is offering. Currently, he is not ready to sacrifice it for any other device.
    williamlondon
  • Reply 2 of 30
    SoliSoli Posts: 2,843member
    There's absolutely no reason for Apple Pay's NFC to be open sourced, and many good reasons not to. There's no exclusivity with Apple so banks can use their same setup with Apple Pay to support Android Pay, Samsung Pay, and whomever else wants to jump in on this system.
    edited February 12 radarthekatmagman1979pscooter63watto_cobrabrakkenDan AndersenlostkiwiSpamSandwichmacuser916
  • Reply 3 of 30
    Surely if Apple is going to allow Store loyalty cards, transport cards and other uses that NFC would indeed be good for, they would do it themselves as a Wallet extension API?

    One system app would then control the radio interaction and user interface for consistency and quality of experience.
    They still need to be able to have a lights-out RFID mode for some of these uses like transport cards.
    Soli
  • Reply 4 of 30
    SoliSoli Posts: 2,843member
    mattinoz said:
    They still need to be able to have a lights-out RFID mode for some of these uses like transport cards.
    I'm not familiar with that. Could you explain?
  • Reply 5 of 30
    radarthekatradarthekat Posts: 1,622moderator
    Trying to think of an appropriate analogy.  

    Maybe it's the same as the alternate AppStore argument.  People want either to avoid the cost of doing business on Apple's turf, or have control of the experience Apple provides.  And this takes me back to the movie theater analogy.  Apple's OS (iOS) is like the theater.  They don't allow in outside food, and they don't provide access to the projectors.  It's Apple's place of business.  Control over it is a big part of the reason operating systems are licensed, not sold.  The intellectual property that runs your iPhone belongs to Apple, not to the owner of the physical handset.  Apple isn't telling anyone they can't have access to the NFC chip; heck, you can rip the phone apart and dig in there and pull out the NFC circuitry, for all the good it'll do you.  Yup, as the owner of the phone, it's yours.  But you can't utilize it via Apple's OS in ways Apple doesn't approve of.  Jailbreak and do whatever you like.  
    edited February 12 Soliteejay2012analogjackpscooter63watto_cobrakrislordbrakkenmacuser916
  • Reply 6 of 30
    iushnt1 said:
    My friend who is living in Australia said that he got an Android becauae of the contactless payment system that his bank is offering. Currently, he is not ready to sacrifice it for any other device.
    That simply can't be true based on the article: 'The banks believe that there is "no genuine competition" in Australia, leaving Apple with a "stranglehold" on the marketplace, should it be allowed to bring a closed system to the country's banks.'

    There is no competition and Apple has a stranglehold.

    /s
    Soliteejay2012watto_cobrawilliamlondonDan AndersenSpamSandwich
  • Reply 7 of 30
    Why is it that when I make an ATM deduction from a bank that is not my bank I get charged $2. Oh that's right because the big 4 banks have a deal to charge each other's customers the fee. They make $billions on their other shenanigans but still they persist with this. Banks crying about Apple stopping competition FFS they surely are having a larf.

    @iushnt1 said:
    My friend who is living in Australia said that he got an Android becauae of the contactless payment system that his bank is offering. Currently, he is not ready to sacrifice it for any other device.

    In Australia people with this problem are changing their bank to ANZ. Somehow the way the other big three banks are making excuses and outright bollox remind me of The Donald's modus operandi.

    edited February 12 Solianantksundaramwatto_cobrawilliamlondonbrakkenDan Andersenhill60
  • Reply 8 of 30
    Android has the market share of smartphones with NFC, yet the Australian banks complain that there is no competition for NFC based payment systems.
    Android is open, so therefore they should be able to tap into Apple's security system - which is safe because Apple does not allow intrusions such as this.

    There are no words...

    Soliwatto_cobrawilliamlondonbrakkenDan Andersenhill60lostkiwi
  • Reply 9 of 30
    Soli said:
    mattinoz said:
    They still need to be able to have a lights-out RFID mode for some of these uses like transport cards.
    I'm not familiar with that. Could you explain?
    Not sure if lights-out mode even exists but it should. The problem that gets brought up with NFC is that it's powered by the phone. So what happens if your phone goes flat or breaks and the NFC system stops working?

    You can't really replace things that use passive RFID cards unless the system has a way of working unpowered. If NFC chips failed so that is functionally the same as current passive RFID cards (powered by the reader) then the problem is no more. Any more sophisticated function would be limited to powered situations but at least that would take away the common problem.  A dead phone would then be no different to a wallet full of cards. 

    I guess the Banks are hoping the ACCC doesn't work out. After all the function they say they want to provide would have this issue that can only really be solved by the hardware manufacture and supply partners not just the software driving it.
  • Reply 10 of 30
    Mike Wuerthele, please update the article to note that in Australia Amex credit cards also work with ApplePay (on those terminals that accept them). Market pressure will eventually make this happen. Certainly, on a recent visit, every time I paid with my AppleWatch and an Amex CC (I haven't tried my Amex charge card) I had an admiring audience. If 1 in 100 of them buy an AppleWatch and get an ANZ CC, and then 1% of the people who see them use it do the same it won't take long for the big three to give in. In the very unlikely event that the ACCC rules in favour of the big banks Apple will simply stop exporting the iPhone and AppleWatch to Australia, leaving everyone to obtain them by mail order. The loss in goods and services tax (GST) will cause the government to act against the banks. The banks must have worked this out, so really it's a delaying action while they try to establish their Android offerings.
    watto_cobraDan Andersen
  • Reply 11 of 30
    These 3 banks are just plain grubs! People should vote with their feet and switch to the ANZ - I did and I love and use Apple Pay everyday. 

    Nobody wants to have to unlock their phone, find, open and unlock their banking app, then select their card - we might as well go back to carrying cash!

    The Commonwealth Bank app has a Loyalty Card Wallet built in and it's horrible - it doesn't even offer Widget support so you can access your favourite loyalty cards without unlocking. If this is the best they can offer now, what makes them think they can do better with NFC access‽ 
    watto_cobralostkiwi
  • Reply 12 of 30
    SoliSoli Posts: 2,843member
    mattinoz said:
    Soli said:
    mattinoz said:
    They still need to be able to have a lights-out RFID mode for some of these uses like transport cards.
    I'm not familiar with that. Could you explain?
    Not sure if lights-out mode even exists but it should. The problem that gets brought up with NFC is that it's powered by the phone. So what happens if your phone goes flat or breaks and the NFC system stops working?

    You can't really replace things that use passive RFID cards unless the system has a way of working unpowered. If NFC chips failed so that is functionally the same as current passive RFID cards (powered by the reader) then the problem is no more. Any more sophisticated function would be limited to powered situations but at least that would take away the common problem.  A dead phone would then be no different to a wallet full of cards. 

    I guess the Banks are hoping the ACCC doesn't work out. After all the function they say they want to provide would have this issue that can only really be solved by the hardware manufacture and supply partners not just the software driving it.
    Thanks for the reply. I agree that a dead phone (or watch) s a potential problem, but how often does this affect people and what downsides are there for an RFID version that doesn't use the same security mechanism of Apple Pay that is behind a password and Touch ID authentication to work?
    watto_cobra
  • Reply 13 of 30
    If Apple opens up NFC to the banks I will stop using it immediately. I even forced my bank to issue a debit/charge(?) card without NFC because I don't trust them to master this technology.
    These passive systems will answer to any sender/receiver that ist strong enough and will shout out your data without any control. I think it was a british university that did a setup (in the size of an A4 paper with easy to buy materials) that could read out the data from up to 0.75 meters! That's also why I wouldn't want a lights out NFC system in my iPhone.
    watto_cobra
  • Reply 14 of 30
    crowleycrowley Posts: 5,173member
    The banks believe that there is "no genuine competition" in Australia
    "Open access to the NFC function, as occurs on the world's most popular and widely installed mobile operating system Android,
    Does not compute.
    SoliSpamSandwich
  • Reply 15 of 30
    fallenjt_Newfallenjt_New Posts: 10unconfirmed, member
    iushnt1 said:
    My friend who is living in Australia said that he got an Android becauae of the contactless payment system that his bank is offering. Currently, he is not ready to sacrifice it for any other device.
    Android pay sucks , move on!
    lostkiwi
  • Reply 16 of 30
    I think Apple would rather have left the market then opening NFC to banks. Both would be bad precedence.
  • Reply 17 of 30
    gatorguygatorguy Posts: 15,932member
    Android has the market share of smartphones with NFC, yet the Australian banks complain that there is no competition for NFC based payment systems.
    Android is open, so therefore they should be able to tap into Apple's security system - which is safe because Apple does not allow intrusions such as this.

    There are no words...

    It would not make the payments any less secure if they were via a banking app rather than via Apple Pay.  Both would adhere to the same security protocols because that's what VISA/Mastercard require. This is about control and revenue, not security. 
    edited February 13 jfanning
  • Reply 18 of 30
    There are many other smaller players in the Australian Apple Pay market other than ANZ and Amex. Several smaller banks and credit unions are on board too. I use One of these smaller institutions and Apple Pay has been a great experience for me!

    So many store checkout people are amazed when I pay with my iPhone 6 which would indicate the adoption of any kind of phone payment system is very much in its infancy here.

    That said, I know a lot of people who are hanging out for their bank to adopt it so they can use it. Take your business elsewhere I tell them. 

    The hold out banks make record profits year in year out and yet they still want to screw customers some more. Shame on them. 
    lostkiwi
  • Reply 19 of 30
    SoliSoli Posts: 2,843member
    iushnt1 said:
    My friend who is living in Australia said that he got an Android becauae of the contactless payment system that his bank is offering. Currently, he is not ready to sacrifice it for any other device.
    Android pay sucks , move on!
    Why is that?
  • Reply 20 of 30
    gatorguy said:
    Android has the market share of smartphones with NFC, yet the Australian banks complain that there is no competition for NFC based payment systems.
    Android is open, so therefore they should be able to tap into Apple's security system - which is safe because Apple does not allow intrusions such as this.

    There are no words...

    It would not make the payments any less secure if they were via a banking app rather than via Apple Pay.  Both would adhere to the same security protocols because that's what VISA/Mastercard require. This is about control and revenue, not security. 
    Control of what though?  I firmly believe that by controlling the direct connection to the NFC chip only through Apple Pay, they feel the device itself is more secure.  In the current scenario, any app that needs to connect to NFC, goes through Apple Pay first, which then engages the NFC chip, before a payment is processed.  The banks would prefer an open API that bypasses Apple Pay and communicates with the NFC chip directly.  This means that the application could bypass the additional layers of security and control, as you, say that Apple currently has in place.  If it comes down to trusting banks themselves (and their apps) or trusting Apple, both for security, and the user experience, I would rather choose Apple.
    edited February 13
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