Australia considers requiring Apple to support Apple Pay rivals

AppleInsider

An Australian committee has heard arguments from Apple, Google, and others regarding the opening up of iPhone NFC payment systems to more than just Apple Pay.

Apple Pay

As the European Union has considered forcing Apple to open up its contactless payment technology, so Australia is hearing arguments for and against the same issue. On Monday, an Australian Parliamentary committee heard from Apple, Google, and more.

According to ZDNet, Apple argued that security is the reason iPhone does not support alternatives while Android does. It also said in a written response to the Parliamentary Joint committee on Corporations and Financial Services, that Apple Pay "is available to all banks in Australia on fair and non-discriminatory terms."

"Contrary to some claims in some of the submissions [by rivals], Apple provides banks with access to NFC functionality on Apple devices," it continued. "Apple has developed a technical architecture that comprises hardware and software components and application programming interfaces (APIs) that banks can use to facilitate contactless payments with their cards and mobile banking applications."

"Apple chose to call this architecture Apple Pay... because it allowed Apple to market the service to consumers without having to preference one bank over another," said Apple's response.

"Apple chose a unique architecture to differentiate itself from Android by enabling consumers to easily switch between cards issued by different banks whilst still supporting contactless payments from third party apps and enabling non-payment uses of NFC technology (such as car keys and transit cards)," said the company. "Apple's pro-competitive technical architecture provides consumers and merchants with greater choice, supporting cards and use cases from thousands of providers."

The written response points out that Apple's system is hardware based, using the Secure Element on the iPhone. By contrast, Apple says that the software-based Host Card Emulation (HCE) is less secure.

Google reportedly denies this, and it also refutes Apple's claim that Apple Pay presents a simpler, clearer experience for users.

"Our payments apps are immensely secure," Diana Layfield, Google president of partnerships in the EMEA region, said in a presentation to the committee. "[Our] HCE system, which is used by a very large number of banks all around the world, is audited directly by the banks... [We] would refute the suggestion our HCE environment is in any way insecure."

"I would argue the user experience on Google Pay is equal to that of Apple Pay," she continued.

The committee is continuing to consider the arguments.

Read on AppleInsider

laytech

Oh boy. Not sure this is a good idea. Competition doesn’t like it so they object and demand access to the technology. Something not right about that,

22july2013

The issue Australia has isn't with the iPhone per se... it's with iOS. If Apple allowed opening up its contact payment technology by allowing users to install Android, that still wouldn't be good enough for Australia. Even though that would give consumers the choice of an open (via Android) or closed (via iOS) contact payment technology, Australia would still be upset because to them it's not about whether the technology is opened or closed, it's about removing the choice for consumers to even have access to a closed technology.

Cesar Battistini Maziero

OMG just buy an Android!

Leave the perfectly fine tech alone. 

avon b7

"Apple Pay "is available to all banks in Australia on fair and non-discriminatory terms." 

Non-discriminatory to banks as long as Apple gets a cut.

That makes it 'discriminatory' for users as they have only one option: Apple Pay. 

That is why my wife refuses to use it. 

Apple is probably being deliberately obtuse on this one. 

Let's see how governments rule on it. 

rob53

As an Apple product user since 1989 I object to any government forcing Apple to do something with its product that it doesn't want to do. It's Apple's product, not the Australian government's  or any other government's product. Australia isn't paying Apple anything and they don't have any legal or ethical right to tell them they have to allow other products access to its specialized hardware and software. As for Apple Pay being discriminatory, that's BS. I can pay for things on-line by inputting typical credit card information. I can use PayPal, which doesn't require NFC. An Apple device can use other payment methods using a company's or bank's app. As far as people complaining about Apple getting a cut, that's another bunch of BS. Everyone gets a cut during every transaction. The merchant gets a cut, the bank get a far larger cut. People need to stop complaining and realized that governments want Apple to open their security framework so they can write apps to steal people's private information. It has nothing to do with banking and everything to do with gaining unfettered access to the phone. Anyone who doesn't understand this is naive and/or utterly underinformed. This is a power grab by governments and Apple better not bend over to these self-serving government officials because it puts my personal information at risk. 

igorsky

avon b7 said:

"Apple Pay "is available to all banks in Australia on fair and non-discriminatory terms." 

Non-discriminatory to banks as long as Apple gets a cut.

That makes it 'discriminatory' for users as they have only one option: Apple Pay. 

That is why my wife refuses to use it. 

Apple is probably being deliberately obtuse on this one. 

Let's see how governments rule on it. 

Your wife doesn't have to use it, that's her choice that she's exercising.  Just like those of us who choose to use it.

Also not sure what your issue is with Apple getting a cut.  Do you have an issue with credit card companies getting a cut?  

igorsky

laytech said:

Oh boy. Not sure this is a good idea. Competition doesn’t like it so they object and demand access to the technology. Something not right about that,

You've just summarized a bunch of the current legal arguments against Apple.

StrangeDays

avon b7 said:

"Apple Pay "is available to all banks in Australia on fair and non-discriminatory terms." 

Non-discriminatory to banks as long as Apple gets a cut.

That makes it 'discriminatory' for users as they have only one option: Apple Pay. 

That is why my wife refuses to use it. 

Apple is probably being deliberately obtuse on this one. 

Let's see how governments rule on it. 

Your wife won’t use Apple Pay because she resents that card issuing banks have to pay a small transaction fee? That’s an…interesting take. So, how does she feel about the fact that retailers have to pay (a larger fee) just to process credit cards!? She must not use any credit cards, huh?

Also, US banks reported the fraud savings was more than the fee to support Apple Pay. 

GeorgeBMac

laytech said:

Oh boy. Not sure this is a good idea. Competition doesn’t like it so they object and demand access to the technology. Something not right about that,

Similar story played out several decades ago:   MCI charged that the phone market had to be opened up to competition.   So, they busted up one of America's premier corporations, one that had served America's needs well for most of a century.   What happened?   Nothing.  MCI went bankrupt.

Monopolies (not that Apple has one) are not always bad.

Competition is not always good.

But, those chasing a market and its money like to ring the bell of competition as the holy grail.

GeorgeBMac

I loved the way Google chose their words.   They said:

"Our payments apps are immensely secure," ... [We] would refute the suggestion our HCE environment is in any way insecure."

Nobody said or suggested that it was insecure.  Just that it's not AS secure as Apple's ApplePay system.

The analogy might be Dairy Queen vs Brusters:  Nobody said a DQ sundae was not good.   But its not AS good as one from Brusters.

And, in both security and sundaes, it's not good or bad -- it's HOW good or HOW secure.

... A door knob lock is secure.   It's just not as secure as a deadbolt.

GeorgeBMac

This has links to the Right To Repair debate too:

Should a repair shop be allowed to tinker with the components that Apple Pay depends on for its security?

Obviously, I think, that would also impact the reputation of iPhones as being highly secure.

GeorgeBMac

StrangeDays said:

avon b7 said:

"Apple Pay "is available to all banks in Australia on fair and non-discriminatory terms." 

Non-discriminatory to banks as long as Apple gets a cut.

That makes it 'discriminatory' for users as they have only one option: Apple Pay. 

That is why my wife refuses to use it. 

Apple is probably being deliberately obtuse on this one. 

Let's see how governments rule on it. 

Your wife won’t use Apple Pay because she resents that card issuing banks have to pay a small transaction fee? That’s an…interesting take. So, how does she feel about the fact that retailers have to pay (a larger fee) just to process credit cards!? She must not use any credit cards, huh?

Also, US banks reported the fraud savings was more than the fee to support Apple Pay. 

early on, when chip cards were just coming out in the U.S. I asked my bank which I should use.   They told me to use Apple Pay because it was the safest.   That was enough for me.

avon b7

igorsky said:

avon b7 said:

"Apple Pay "is available to all banks in Australia on fair and non-discriminatory terms." 

Non-discriminatory to banks as long as Apple gets a cut.

That makes it 'discriminatory' for users as they have only one option: Apple Pay. 

That is why my wife refuses to use it. 

Apple is probably being deliberately obtuse on this one. 

Let's see how governments rule on it. 

Your wife doesn't have to use it, that's her choice that she's exercising.  Just like those of us who choose to use it.

Also not sure what your issue is with Apple getting a cut.  Do you have an issue with credit card companies getting a cut?  

The cut isn't the problem. As I clearly stated, it's the discriminatory nature of it.

My wife exercises that right of hers but it doesn't change the fact that Apple is closing off a technology that could easily be used by other competitors.

That is what the whole piece is about.

We'll see what happens. 

avon b7

rob53 said:

As an Apple product user since 1989 I object to any government forcing Apple to do something with its product that it doesn't want to do. It's Apple's product, not the Australian government's  or any other government's product. Australia isn't paying Apple anything and they don't have any legal or ethical right to tell them they have to allow other products access to its specialized hardware and software. As for Apple Pay being discriminatory, that's BS. I can pay for things on-line by inputting typical credit card information. I can use PayPal, which doesn't require NFC. An Apple device can use other payment methods using a company's or bank's app. As far as people complaining about Apple getting a cut, that's another bunch of BS. Everyone gets a cut during every transaction. The merchant gets a cut, the bank get a far larger cut. People need to stop complaining and realized that governments want Apple to open their security framework so they can write apps to steal people's private information. It has nothing to do with banking and everything to do with gaining unfettered access to the phone. Anyone who doesn't understand this is naive and/or utterly underinformed. This is a power grab by governments and Apple better not bend over to these self-serving government officials because it puts my personal information at risk. 

You are presupposing a lot there.

The Australian government may well have legal rights to force Apple to open up.

As a self enclosed platform Apple is on solid ground. The second it opens the door and sticks a toe out of it, things change. As can be observed here.

Apple cannot make a cent out of Apple Pay without first dealing with the banks. They are sitting well out of Apple land. Different operational rules may apply here.

We'll have to see how different investigations play out.

Internet payments are totally irrelevant here. It's about NFC hardware. That's as far away as you can get from online payments. 

avon b7

StrangeDays said:

avon b7 said:

"Apple Pay "is available to all banks in Australia on fair and non-discriminatory terms." 

Non-discriminatory to banks as long as Apple gets a cut.

That makes it 'discriminatory' for users as they have only one option: Apple Pay. 

That is why my wife refuses to use it. 

Apple is probably being deliberately obtuse on this one. 

Let's see how governments rule on it. 

Your wife won’t use Apple Pay because she resents that card issuing banks have to pay a small transaction fee? That’s an…interesting take. So, how does she feel about the fact that retailers have to pay (a larger fee) just to process credit cards!? She must not use any credit cards, huh?

Also, US banks reported the fraud savings was more than the fee to support Apple Pay. 

She does not resent any of that. She rejects not having choice.

avon b7

GeorgeBMac said:

StrangeDays said:

avon b7 said:

"Apple Pay "is available to all banks in Australia on fair and non-discriminatory terms." 

Non-discriminatory to banks as long as Apple gets a cut.

That makes it 'discriminatory' for users as they have only one option: Apple Pay. 

That is why my wife refuses to use it. 

Apple is probably being deliberately obtuse on this one. 

Let's see how governments rule on it. 

Your wife won’t use Apple Pay because she resents that card issuing banks have to pay a small transaction fee? That’s an…interesting take. So, how does she feel about the fact that retailers have to pay (a larger fee) just to process credit cards!? She must not use any credit cards, huh?

Also, US banks reported the fraud savings was more than the fee to support Apple Pay. 

early on, when chip cards were just coming out in the U.S. I asked my bank which I should use.   They told me to use Apple Pay because it was the safest.   That was enough for me.

Part of the issue here could have been the US being a decade late to the chip card party and your particular bank.

In the EU particularly things have moved ahead very quickly.

In Spain for example, I believe signature authentication was phased out years ago.

My banking app gives me absolute control over my cards. I can suspend and reactivate them at a touch of a button. I'm informed of every transaction that goes through.

Someone recently tried to open an account using my brother's ID information. That was thwarted by the bank simply communicating with him over a secure channel to confirm it with him.

PSD2 is being implemented across the board (although Amazon and some others seem to have wangled an exception), adding another layer of security to online purchases, although mine go through a virtual card anyway that doesn't have money on it until I 'charge' it. 

jungmark

avon b7 said:

"Apple Pay "is available to all banks in Australia on fair and non-discriminatory terms." 

Non-discriminatory to banks as long as Apple gets a cut.

That makes it 'discriminatory' for users as they have only one option: Apple Pay. 

That is why my wife refuses to use it. 

Apple is probably being deliberately obtuse on this one. 

Let's see how governments rule on it. 

That’s weird, I’m not forced to use Apple Pay. My discover supports tap n pay. I also save CC on safari so I can use that on websites. 

mattinoz

avon b7 said:

"Apple Pay "is available to all banks in Australia on fair and non-discriminatory terms." 

Non-discriminatory to banks as long as Apple gets a cut.

That makes it 'discriminatory' for users as they have only one option: Apple Pay. 

That is why my wife refuses to use it. 

Apple is probably being deliberately obtuse on this one. 

Let's see how governments rule on it. 

Does she also refuse to use CommBank pos terminals? 
the organisation that makes those gets a cut of every transaction as well. 

avon b7

jungmark said:

avon b7 said:

"Apple Pay "is available to all banks in Australia on fair and non-discriminatory terms." 

Non-discriminatory to banks as long as Apple gets a cut.

That makes it 'discriminatory' for users as they have only one option: Apple Pay. 

That is why my wife refuses to use it. 

Apple is probably being deliberately obtuse on this one. 

Let's see how governments rule on it. 

That’s weird, I’m not forced to use Apple Pay. My discover supports tap n pay. I also save CC on safari so I can use that on websites. 

No one is forced to use Apple Pay.

Using Safari for online payments has nothing to do with NFC. 

avon b7

mattinoz said:

avon b7 said:

"Apple Pay "is available to all banks in Australia on fair and non-discriminatory terms." 

Non-discriminatory to banks as long as Apple gets a cut.

That makes it 'discriminatory' for users as they have only one option: Apple Pay. 

That is why my wife refuses to use it. 

Apple is probably being deliberately obtuse on this one. 

Let's see how governments rule on it. 

Does she also refuse to use CommBank pos terminals? 
the organisation that makes those gets a cut of every transaction as well. 

What is the relevance of that in this discussion or what the Australian authorities are looking into?