Australian banks call alternatives to NFC 'unrealistic' in fight to avoid using Apple Pay

Posted:
in iPhone
Major banks in Australia find alternatives to NFC-based payments, such as Apple Pay, to be an "unrealistic" prospect to the Australian mobile payment marketplace, according to a submission provided to a government regulator, arguing for Apple to open up access of the iPhone's NFC technology to third parties.




The latest submission from the Commonwealth Bank of Australia, Westpac Banking Corporation, the National Australia Bank, and the Bendigo and Adelaide Bank to the Australian Competition and Consumer Commission (ACCC) reiterate earlier arguments concerning their request for NFC access to use their own mobile wallets. This time, ZDNet reports the banks are insisting that alternative mobile payment techniques that avoid using NFC are not a feasible solution for their customers to use.

In the document, originally supplied to the ACCC on March 9 but only recently published, the banks note examples of mobile payments and loyalty programs in other countries, which either use Android with NFC or a non-NFC point-of-sale technology, such as a PIN or an on-screen barcode used to conduct a transaction, for multiple platforms. The banks insist these countries have "less NFC infrastructure in place than Australia, and Android has a much greater presence," claiming Android's market share in France is "well over 70 percent" and "as high as 97 percent" in India.

"These alternatives are unrealistic in Australia, which has the world's highest adoption of contactless NFC card payments and one of the world's highest iPhone market shares, particularly among customers likely to use mobile apps," the bank submission states. "ING Direct recently confirmed that 70 percent of customers who use its banking app use iPhones, which is consistent with the Applicants' experience."

Mobile wallet creators are "locked out of the established payment structure" by Apple, the group claims, with NFC access on the iPhone able to "provide substantial public benefits." These benefits include "more opportunities for cashbacks and other promotions," as using these alternative wallets would avoid the Apple Pay transaction fee, and in theory would provide an incentive to "share some or all of that saving with the customer," as well as to fund development of new features.




Last month, the banks dropped fee negotiations as part of its argument against using Apple Pay, instead opting to concentrate on forcing Apple to open up NFC to other parties. Previously, the banks were denied the ability to collectively negotiate terms with Apple over Apple Pay's fees, and instead were ordered by the ACCC to negotiate individually in a draft determination.

Echoing previous arguments, the banks also write that NFC access is essential for "meaningful competition" between mobile wallets. The one-step tap-for-payment process offered by Apple Pay is seen as a far easier process for end users than competing wallet systems, which require users to interact more with their phones, and typically require multiple steps to perform a transaction.

It is also claimed that Apple's refusal to provide NFC access to third parties is "inconsistent with its own policies and practices." The banks highlight the fact that practically all other hardware on an iPhone can be accessed by third-party apps, including the camera, Bluetooth, the speaker and microphone, and its accelerometer.

Taking the example of camera access, it is claimed the many apps that rely on the hardware to function "could still exist even if they could not access the iPhone camera but relied on images taken and saved by the Apple Camera app. However, most of these apps would be severely degraded in functionality and many would not be possible at all."

By providing the ability for apps to use NFC, it would "allow a multitude of innovative uses of the kind that have developed in relation to these other functions. There is no reason why the NFC function should be singled out and innovation prevented in this one area."

Apple has previously argued that providing third-party access to NFC would compromise security, though the integration of Apple Pay in Apple's devices should not prevent the creation of other digital wallets for iPhones. Despite the disagreement, Apple still wants to work with the resistant banks to provide Apple Pay to their customers.

Following a period of public consultation after publishing a draft determination, the ACCC is expected to deliver a final determination this month.
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Comments

  • Reply 1 of 51
    technotechno Posts: 676member
    Same old story. Resist, resist, resist, relent. 

    What a stupid argument, to demand Apple let competitors use their phones NFC for inferior and insecure systems. There is a reason those competitors are not succeeding. Maybe the banks should open up their bank vaults and let them be used by competitors. 
    coolfactorsockrolidSpamSandwichneo-techcalichiaMetriacanthosauruslostkiwirepressthistzm41
  • Reply 2 of 51
    I'm not going to bother reading the article twice, but don't the arguments against Apple seem contradictory?
    sockrolidSolicalijbdragonwatto_cobra
  • Reply 3 of 51
    Rayz2016Rayz2016 Posts: 4,461member
    I'm not going to bother reading the article twice, but don't the arguments against Apple seem contradictory?
    They did indeed. 

    The Australian banks seem to think that ApplePay uses something other than NFC. 
    sockrolidwatto_cobra
  • Reply 4 of 51
    I'd put my money on Apple having a better understanding of internet security than Australian banks.  I can live without Australia having Apple Pay, tho.
    calirepressthisStrangeDaysbrakken
  • Reply 5 of 51
    wood1208wood1208 Posts: 1,639member
    It's human nature to resist a change against own mentality. It's matter of time, Australian banks will turn around and support Applepay like banks in the rest of worlds. Apple pay is secure and it works.
    calirepressthisjbdragonwatto_cobra
  • Reply 6 of 51
    Colluding  bullies  
    stanthemanSpamSandwichlostkiwirepressthiswatto_cobra
  • Reply 7 of 51
    loquiturloquitur Posts: 103member
    Noting that Apple possesses Australian patents, e.g. 2017201548 from:

    http://pericles.ipaustralia.gov.au/ols/auspat/quickSearch.do?queryString=apple&resultsPerPage=

    perhaps the banking industry would want to license such things.

    And what if Apple refuses -- is there compulsory licensing?   The law exists, due
    to either the patentee 'not locally working' the patents (not Apple's case), or
    a trade or industry is "unfairly prejudiced" in some manner:

    http://www.fpapatents.com/resource?id=216

    As of 2013 no compulsory licences (Oz-speak uses two "c's" for the noun)
    have ever been granted in Australia, perhaps due to, as the author notes, a
    "costly and time consuming process with the Federal Court."

    edited March 2017 watto_cobra
  • Reply 8 of 51
    coolfactorcoolfactor Posts: 1,325member
    By providing the ability for apps to use NFC, it would "allow a multitude of innovative uses of the kind that have developed in relation to these other functions. There is no reason why the NFC function should be singled out and innovation prevented in this one area." 

    Have the banks demonstrating something innovative that can be done? It's about one thing, and one thing only — transferring money from a bank account to a merchant. The only differences from solution to solution is who gets a cut, and these banks want to keep more for themselves, rather than giving a percentage to Apple for each transaction.
    neo-techchiarepressthisdouglas baileywatto_cobra
  • Reply 9 of 51
    phone-ui-guyphone-ui-guy Posts: 1,018member
    We can only hope the ACCC tells them to shut up and sign up for Apple Pay. The banks are basically admitting that most of their customers would benefit from it and they are withholding it simply because they want the transaction fee to go to their app development team instead of Apple's. Let the money go to Apple and this is done.
    calichialostkiwirepressthisjbdragonwatto_cobrabrakken
  • Reply 10 of 51
    rob53rob53 Posts: 1,940member
    Apple is very consistent in not allowing anyone access to NFC except its own apps. Apple allows use of TouchID but only in very specific ways. I bought an iPhone because of its security, not because a third-party app could mess around with it and allow hackers to get in and destroy iOS' built in security. If Australian banks don't like these restrictions, then they can build their own system using mobile devices they build and sell (good luck on anyone buying them). 
    sockrolidneo-techchia2old4funrepressthisjbdragonwatto_cobrawillcropointtgr1brakken
  • Reply 11 of 51
    The Australian banks want detailed transaction data plus ApplePay fees, but those fees are tiny and therefore only a sideshow.

    Australia has a very small number of banks, and in this instance they are attempting to behave as a cartel (group monopoly) both to pressure local politicians and (if successful) to use consumer data for marketing-advertising purposes.

    Collusion is difficult to manage successfully, except in small groups. If Australian banks are able to collude on this issue, they may be colluding on others, too.
    lostkiwiwatto_cobratgr1
  • Reply 12 of 51
    noelosnoelos Posts: 101member
    They want to convince you to use the bank-branded app to retain control of the user experience and keep them fenced in. They refuse to accept that there's a lot more to ApplePay than just NFC. There's the tolenization strategy, the touchid secured secure enclave which is tamper proof. But if they were to implement a payment system of their own and it had a security breach - you know the headlines would include Apple prominently because that's pure ClickBait. The banks don't want to share fees and they don't want their cards mixed up in a wallet where they don't control the whole branding. And as for the possibility they might pass some of the savings into their customers! If the ACCC believe that, I have a very attractive bridge in Sydney to sell them.
    caliwatto_cobraentropystgr1
  • Reply 13 of 51
    alexmacalexmac Posts: 46member
    When will the banks understand that we are the clients and that the money is ours?

    on the other hand, the solution may be a card to be used with any bank like Carrefour Pass
    caliwatto_cobra
  • Reply 14 of 51
    SoliSoli Posts: 8,405member
    I'm not going to bother reading the article twice, but don't the arguments against Apple seem contradictory?
    That's my thought. Apple has no monopoly or control over NFC-based anything, nor do they in any way, through the use of contracts, prevent Android Pay, Samsung Pay, or YouNameIt Pay from working on other devices or with any financial institution.
    calichiawatto_cobra
  • Reply 15 of 51
    wood1208wood1208 Posts: 1,639member
    Australian banks trying to re-invent the wheel. But, they can try failed CurrentC which JPMorgan is planning to use and learned that easier and better for their customers to support ApplePay than alternative.
    edited March 2017 calichiawatto_cobra
  • Reply 16 of 51
    volcanvolcan Posts: 1,737member
    Who cares? Even if every bank in the world accepted Apple Pay unless my grocery store accepts it, it is worthless to me.
    cali
  • Reply 17 of 51
    polymniapolymnia Posts: 893member
    TLDR the comments. 

    Is is this a little like complaining that your customers want to use American Express cards at your business that only take Visa?

    if you don't want to take AE cards, you are consciously making yourself difficult for those cardholders to work with. You cannot then ask a government agency to require people carry Visa because it's convenient for your business. 
    watto_cobra
  • Reply 18 of 51
    calicali Posts: 3,495member
    Why is there so much resistance to such a great innovation??
    Apple invents this great super secure method of payments that benefit banks and stores and their reaction is "No!! Me no wanna!!"

    By providing the ability for apps to use NFC, it would "allow a multitude of innovative uses of the kind that have developed in relation to these other functions. There is no reason why the NFC function should be singled out and innovation prevented in this one area." 

    Have the banks demonstrating something innovative that can be done? It's about one thing, and one thing only — transferring money from a bank account to a merchant. The only differences from solution to solution is who gets a cut, and these banks want to keep more for themselves, rather than giving a percentage to Apple for each transaction.
    Words can't describe how much I hate this!!
    Apple comes up with a brilliant idea then suddenly others have ideas just as bright that they couldn't think of BEFORE Apple's solution. 

    Its like the idiot android users who believe their iPhone knockoffs are "innovative" even though %99 of their device uses Apple's technology but that %1 is where the "innovation" is at. 

    watto_cobra
  • Reply 19 of 51
    They have yet to make a single valid argument that would justify compromising the security of Apple Pay, which is far more of a reason to use it than convenience.
    watto_cobra
  • Reply 20 of 51
    sflocalsflocal Posts: 4,304member
    What's really sad are the banks essentially lying in court about the real reasons why they hardware-level access to Apple's tech.  They are just hoping the court system is too stupid to understand all the technology going into what Apple has created.

    Shameful behavior really.  Apple goes through all this effort to develop one of the most secure and efficient methods to do financial transactions, made it hugely successful everywhere else in the world, and these slimy Aussie banks just want to ride on top of that train and let Apple do all the work.

    Screw them.  I hope the courts see right through their charade and drop the hammer hard on them.

    Develop your own tech.  Don't force someone else to do the work for you.
    linkmanwatto_cobraentropys
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