Australian banks say Apple Pay is anticompetitive, appeal to anti-trust regulators

Posted:
in iPhone edited July 2016
Three of Australia's major banks on Wednesday filed a joint application with the Australian Competition and Consumer Commission to force Apple into negotiations over the installation of third-party mobile payments software on iPhone.




A spokesman representing Australia's three biggest lenders, National Australia Bank (NAB), Commonwealth Bank of Australia and Westpac Banking Corp, told Reuters the banks believe Apple's restrictions on third-party mobile wallet solutions amounts to anticompetitive behavior.

By filing the ACCC application, the banks seek approval to collectively negotiate the installation of non-Apple Pay software on iPhone hardware, the report said. Currently, Apple only allows its own in-house mobile payments system Apple Pay, and the corresponding Wallet app, on iOS devices.

According to the The Sydney Morning Herald, the bloc wants open access to iPhone's NFC technology.

"This is about providing Australians with real choice and better outcomes," said Lance Blockley, a senior advisor at Novantas speaking on behalf of the banks. "If successful, the application would have tremendous benefits for the entire Australian mobile payments landscape including for public transport fares, airlines, ticketing, store loyalty and rewards programs and many more applications yet to be developed."

The complaint comes eight months after Apple Pay launched in Australia last November through a limited partnership with American Express. At the time, none of Australia's big four banks offered support for the service, and Apple continues to face staunch resistance from an entrenched local finance sector.

In April, ANZ became the first major Australian bank to break rank and offer support for Apple's fledgling payments service. Two weeks later the bank noted a 20 percent spike in online credit card and deposit account applications. Following that news, NAB, Commonwealth and Westpac, the three banks that filed with the ACCC today, were all said to have reentered negotiations with Apple.
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Comments

  • Reply 1 of 59
    lolliverlolliver Posts: 429member

    I was one of those customers that signed up for an account with ANZ as soon as they announced support for Apple Pay. I knew it would take a while for the other banks to jump on board and I could have guessed something like this would have happened.

    Very hypocritical of them to talk about anticompetitive behaviour when the big banks here do all they can to limit competition themselves to protect their profit margins.

    They just want Apple to allow them access to the NFC chip so they can release their own apps and not pay Apple a cent for the privilege.

    Hopefully some of the smaller banks will also start to support Apple Pay here soon and more customers can make the switch away from NAB, Westpac and Commonwealth. Then they might learn the value that Apple's platform could provide them.

    fotoformatmattinozRosynaDeelronjay-tcapasicumwilliamlondonjensonbpalominepotatoleeksoup
  • Reply 2 of 59
    arthurbaarthurba Posts: 118member
    Apple's implementation is the only RFID one that I've seen that genuinely offers privacy to the consumer (by hiding the credit card details from the retailer and merchant service provider.   I'm sure there are some, but I've not seen them here in Oz.

    NAB, Westpac and CommBank all have RFID solutions of their own that have no security or privacy controls (from plastic cards to apps on Android).

    From my PoV - Apple, far from stifling competition, are the only ones providing competition.

    Finally - the reuters article is misleading "Apple ... does not allow third-party electronic payment apps to be loaded onto to the hugely popular smartphones.".  Well then I wonder what the Starbucks card app on my iPhone is doing then?  It's a third-party electronic payment app!  

    This is about RFID, not phones, and hopefully if Apple's solicitors can make that case then the ACCC will see the complaint has no merit.


    lolliveriqatedoEsquireCatsSpamSandwichRosynaDeelronchiajay-tcapasicumwilliamlondon
  • Reply 3 of 59
    iqatedoiqatedo Posts: 1,723member
    lolliver said:

    I was one of those customers that signed up for an account with ANZ as soon as they announced support for Apple Pay. I knew it would take a while for the other banks to jump on board and I could have guessed something like this would have happened.

    Very hypocritical of them to talk about anticompetitive behaviour when the big banks here do all they can to limit competition themselves to protect their profit margins.

    They just want Apple to allow them access to the NFC chip so they can release their own apps and not pay Apple a cent for the privilege.

    Hopefully some of the smaller banks will also start to support Apple Pay here soon and more customers can make the switch away from NAB, Westpac and Commonwealth. Then they might learn the value that Apple's platform could provide them.

    After over 40 years with my current bank, considering the same. Two credit cards compromised by slack, on-line vendor controls. My bank at least fully refunded losses and assisted in searching for more instances of fraud but these would not have happened with ApplePay.

    lolliverSpamSandwichDeelronjay-tcapasicumpalominestompyjbdragonMacsAlways
  • Reply 4 of 59
    lolliverlolliver Posts: 429member
    arthurba said:
    Apple's implementation is the only RFID one that I've seen that genuinely offers privacy to the consumer (by hiding the credit card details from the retailer and merchant service provider.   I'm sure there are some, but I've not seen them here in Oz.

    NAB, Westpac and CommBank all have RFID solutions of their own that have no security or privacy controls (from plastic cards to apps on Android).

    From my PoV - Apple, far from stifling competition, are the only ones providing competition.

    Totally agree. The NAB, Westpac and CommBank don't care about privacy or providing the better solution. I don't want/need them to provide their own solution. ApplePay is far superior to anything they have come up with for both privacy and ease of use.

    Hopefully this case is thrown out soon and we can see ApplePay more widely adopted here.

    Deelronjay-tcapasicumjensonbpalominestompyjbdragonMacsAlwaysbadmonklostkiwi
  • Reply 5 of 59
    Typical approach of a banking cartel:
    - speak of vibrant competition while actually preserving status quo or consolidating;
    - reap profits;
    - fund politicians;
    - receive desired legislation and political support;
    - raise barriers to entry for potential new competitors;
    - privatize profits while protecting for socialized risk;
    - avoid innovation and customer oriented investment (unless it dramatically decreases operating expenses);
    - if you do innovate, take off the shelf systems that you can control (vendor must always be subordinate);
    - if a new entrant appears boycott;
    - if new entrant's efforts gain traction, raise regulatory challenges;
    - if regulatory system doesn't belong to your lobbying organization, begin negotiations to work with vendor with hope that regulatory threats, or homegrown alternatives will be enough to tame demands of vendor. 

    If if the system isn't corrupt, then for the banking cartel to get in bed with a strong competitor, it takes customers switching loyalties to get things moving, and something like the Kubler Ross stages of grieving to get through. 
    lolliverawilliams87mattinozDeelronjay-tjensonbloquiturpalomineprolinestompy
  • Reply 6 of 59
    lolliverlolliver Posts: 429member
       iqatedo said:
    After over 40 years with my current bank, considering the same. Two credit cards compromised by slack, on-line vendor controls. My bank at least fully refunded losses and assisted in searching for more instances of fraud but these would not have happened with ApplePay.

    Yeah, I was with my former bank for about 30 years before making the switch. Most people tend to stay with their bank long term though so I don't think the banks tend to worry too much about upsetting their customers. Maybe if more people left over things like poor privacy/security, lack of technical innovation or high/excess fees the banks might actually start to get the message. ;)
    iqatedocapasicumstompyjbdragonMacsAlwayslostkiwijony0
  • Reply 7 of 59
    Time to pull Apple Pay out of Australia if anything happens. 
    latifbpanantksundaramMacsAlways
  • Reply 8 of 59
    tallest skiltallest skil Posts: 43,399member
    Typical approach of a banking cartel:
    You forgot “force a switch to fiat currency so that you can print (type zeroes) as much as you want.”
    capasicumlatifbpjbdragonbadmonk
  • Reply 9 of 59
    EsquireCatsEsquireCats Posts: 1,188member
    Australian banks are even more profitable than their Swiss counterparts - on part because they pull stunts like this, but mostly because they have absurd fees that are significantly out of order to the services provided. This is the result from a lack of real competition.

    Despite Australia's relatively small population, transaction fees were over 2 billion in 2015. 
    Make no mistake, this is what the banks are protecting - they don't give a damn about consumers or competition. In fact they try to harm competition at every opportunity.

    The suggestion that any or all providers of closed-NFC hardware must open such hardware for competitors is idiotic. There is no such thing as having a monopoly on your own platform. Meanwhile Commonwealth Bank's latest EFT terminal deliberately excludes support for American Express, a clear indication that they are two faced about such an approach.

    The "modern" solutions provided by these banks are laughable and lacking in security. One such example is the Commonwealth Bank's stick-on NFC token which they advise to stick onto your smart phone. The problem here is that sales under $100 are completely pin code free, and should the phone be stolen the primary means of managing the token is taken away. Compare that to Apple Pay which requires a finger print for verification, and utilises a tokenised transaction and it's clear that the banks aren't interested in even basic protections for consumers.
    lolliverDeelronjay-tcapasicumpalominestompyairmanchairmanjbdragondysamoriaMacsAlways
  • Reply 10 of 59
    lolliverlolliver Posts: 429member
    Time to pull Apple Pay out of Australia if anything happens. 


    If Apple pulled out of a market anytime they faced competition or legal action they wouldn't get very far.

    I don't see Apple pulling Apple Pay out of the US market just because retailers there are so backwards and out of touch with modern technology that NFC payment support is few and far between. I highly doubt Apple is going to pull out of China because they have faced issues from the government there with iTunes and iBook's stores..

    Glad Apple isn't as weak as you obviously want them to be.

    This issue is going to be much smaller than what they had to deal with over the anticompetitive iBook nonsense in the US.

     

    But sure, if the going gets tough Apple should just pull out of the market /s

    edited July 2016 damonfstompyjbdragonMacsAlways
  • Reply 11 of 59
    iqatedoiqatedo Posts: 1,723member
    lolliver said:
       iqatedo said:
    After over 40 years with my current bank, considering the same. Two credit cards compromised by slack, on-line vendor controls. My bank at least fully refunded losses and assisted in searching for more instances of fraud but these would not have happened with ApplePay.

    Yeah, I was with my former bank for about 30 years before making the switch. Most people tend to stay with their bank long term though so I don't think the banks tend to worry too much about upsetting their customers. Maybe if more people left over things like poor privacy/security, lack of technical innovation or high/excess fees the banks might actually start to get the message. ;)
    My bank has been fabulous, even when the the fraud happened. It was one of the first to adopt practices that suit me. In this however, they need to step up soon, although I cannot see that happening. Hoping... for now. :smiley: 
    lolliver
  • Reply 12 of 59
    mattinozmattinoz Posts: 1,628member
    "This is about providing Australians with real choice and better outcomes," said Lance Blockley, a senior advisor at Novantas speaking on behalf of the banks.

    The press conference had to pause at this point as the contained snigger of most Journalists turned into thunderous burst of contagious laughter.
    DeelronchiacapasicumprolinestompybrakkendysamoriaMacsAlwaysindyfxlostkiwi
  • Reply 13 of 59
    Hopefully the greedy banks lose!

    Thanks ANZ - loving the Apple Pay experience!

    Maybe Apple should launch a counter claim with the ACCC, over the remaining big 4 not giving customers the choice to have access to Apple Pay. 
    damonfcapasicumdysamoriaMacsAlwayslostkiwilolliveranton zuykov
  • Reply 14 of 59
    Hmmph

    Not Surprised

    This has nothing to do with anti competitive issues and everything to do with the fact the Aussie banks IT staff are so useless they can't implement Apple Pay

    Used to work at an Aussie Bank (not in IT) - they outsource all their development to the cheapest off shore source they can find - they were meant to have implemented Apple Pay by October last year (well that was the latest deadline - it was March before that) - they couldn't because the cheap "we all have (bought) PHd's from the best universities in our country" developers couldn't figure it out

    badmonklostkiwi
  • Reply 15 of 59
    Our Australian Banks crying Poor again, and are some of the most profitable in the world.  :s

    I too signed up with ANZ so I can take advantage of Apple Pay. I hope the ACCC doesn't fall for this one, but track record to date would suggest otherwise...
    dysamoriaMacsAlwayslostkiwilolliver
  • Reply 16 of 59
    Arghh this to and froing is driving me crazy.  I purchased an Apple Pay compatible iPhone two years ago, hoping we'd see some touch on action soon, and I'm still waiting.  Our four big banks are sooo controlling, yet (now three of them) they say they want other payment options, (ignoring possible technology limitations/differences in payment technologies) but would Android have ApplePay on their phones? No!  I'm with Apple, because I'm more trusting of Apple software and technologies than others, and didn't expect banks to control/stifle this Pay technology.  I want to be able to stop carrying my dam wallet.  Why carry a wallet when the phone is with me all the time?  Get with the times Aussie banks...
    razormaidlostkiwi
  • Reply 17 of 59
    jfanningjfanning Posts: 3,398member
    Our Australian Banks crying Poor again, and are some of the most profitable in the world.  :s

    I too signed up with ANZ so I can take advantage of Apple Pay. I hope the ACCC doesn't fall for this one, but track record to date would suggest otherwise...

    So you complain about their profitability, and then signed up to the most profitable one?
    cnocbui
  • Reply 18 of 59
    cubefancubefan Posts: 53member
    Anti-competitive?  Those three are having a laugh and a joke at their customers expense because they don't have enough competition - contactless reader technology is fairly widespread in the UK - but RFID bank cards are fundamentally insecure to walk-by scamming.  I use ApplePay daily and watch people in the coffee shop queues' reaction as I use the same device for loyalty card and payment, its much faster and more secure than chip and pin, cards only come out when there's antediluvian technology in the shops or I need some cash.   Why do I need to put my card in a slot? can't I have ApplePay secured cash machines. Please?
    razormaidcapasicumlostkiwilolliver
  • Reply 19 of 59
    mcdavemcdave Posts: 1,749member
    So by painting ApplePay as a monopoly they get to preserve their oligopoly.  ApplePay is a distinct product which they should chose to accept or not. If I wanted to be patronised with the alleged benefits of choice I'd have bought Android. By forcing Apple to adopt other payment system's failed architect they're reducing choice.
    latifbpdysamorialostkiwilolliver
  • Reply 20 of 59


    "This is about  providing Australians real choice and better outcomes"

    That's a bit rich coming from the spokesman for what is the most profitable banking cartel in the world. 

    It's hillarious that the banks go to the ACCC crying foul.  I think of the many times the quadopoly that is Australia's "competive" banking systems are usually having their butts whipped by the ACCC for some consumer rip off.

    I'm sure Apple and the ACCC's response to this will be "go [email protected]$k yourselves Aussie banks". 


    dysamorialostkiwilolliver
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