ANZ's Apple Pay exclusivity drives credit card applications, other Australian banks take notice

Posted:
in iPhone edited May 2016
Australian bank ANZ earlier this month observed a 20 percent spike in online credit card and deposit account applications after announcing support for Apple Pay, results that have prompted holdouts to rethink their position on Apple's payments service.




In April, ANZ became the first of Australia's "big four" banks to break rank and adopt Apple Pay, rolling out initial support for bank issued Visa credit and debit cards. Shortly after the service launched, chief executive Shayne Elliott credited the ensuing social media buzz with a 20 percent uptick in applications and heightened interest in the company's website, The Australian Financial Review reported last week. The bank's Apple Pay mini site, for example, logged 61,000 unique visitors over four days.

The remaining big four banks, Commonwealth Bank, National Australia Bank and Westpac, resisted Apple's advances in a bid to protect their credit card transaction fees, which the report estimates is worth billions of dollars. To net Apple Pay, ANZ supposedly agreed to offer Apple a slice of its interchange fees, though specifics surrounding the deal remain secret.

According to the publication, the Reserve Bank of Australia is looking to lower transaction fees to 30 cents for $100 of transactions, down from 50 cents per $100. By comparison, Apple is thought to net 15 cents for every $100 Apple Pay transaction in the U.S.

With ANZ demonstrating a successful launch, Commonwealth, NAB and Westpac are once again negotiating terms for future Apple Pay integration, the report said. The banks are apparently willing to entertain the idea, as Westpac already offers a touchless payments solution for Samsung devices, while NAB introduced its own branded product for Android in January.

Transaction fees, however, are not Apple's endgame. The Cupertino tech giant has made it abundantly clear that Apple Pay is first and foremost a value added iOS platform feature. For example, when negotiating terms to bring Apple Pay into China, Apple reportedly agreed to take half of its normal fee rate. Revenue from Apple Pay pales in comparison to hardware device sales and the sustained income of a "sticky" ecosystem.

Apple Pay is currently available in the U.S., Canada, China, Australia, Singapore, and the UK. With the introduction of iPhone SE, Apple's entire smartphone lineup -- and Apple Watch --supports touchless NFC transactions.

Comments

  • Reply 1 of 12
    ericthehalfbeeericthehalfbee Posts: 4,425member
    Most banks are pretty much the same in terms of what they offer, making switching relatively easy.

    So when one bank offers a superior payment solution I could see people switching and/or opening another account to access that feature.

    The security alone (no more skimmed cards) is pretty compelling. 
    lollivercali
  • Reply 2 of 12
    robmrobm Posts: 1,068member
    C'mon ANZ, NZ already.
    ffs jeez, NFC is everywhere ...
    edited May 2016 lostkiwicali
  • Reply 3 of 12
    applesauce007applesauce007 Posts: 1,688member
    Go ANZ !
    Go Apple Pay !
    lostkiwilollivercali
  • Reply 4 of 12
    lostkiwilostkiwi Posts: 638member
    robm said:
    C'mon ANZ, NZ already.
    Yeah I can't see why they are dragging their heels opening ANZ ApplePay in NZ - it is more than two thirds of the name ANZ for a start!
    cali
  • Reply 5 of 12
    blahfishblahfish Posts: 8member
    I switched banks, and am loving Apple Pay! We've had PayPass/PayWave for years, but Apple Pay really is amazing!

    If my old bank adopts it, I'm not gonna switch back.
    lollivercali
  • Reply 6 of 12
    lolliverlolliver Posts: 486member
    I had been considering a switch to ANZ for a few months before they announced Pay as my old bank was charging me too much in fees. As soon as ANZ made the announcement I made the switch. 

    To be honest I would have switched even without the lower fees as long as it didn't make me worse off. The security and convenience of Pay alone would have made it worth the switch. 

    It's great to see though that the vote of confidence from consumers has got the other banks reconsidering their stance against Pay. 

    Hopefully as more banks and more customers in the US sign up for Pay the merchants will follow. But the US seems a bit more restart to change in this area. 
    cali
  • Reply 7 of 12
    subbiessubbies Posts: 71member
    Loving Apple Pay
    edited May 2016 cali
  • Reply 8 of 12
    The downside is ANZ’s awful and uninformative online banking site and companion mobile app, “goMoney”. On logging in your account list shows total balance, not available balance (total minus pending), which isn’t helpful when making multiple transactions easily (e.g. Apple Pay). On drilling into the transaction list you do see both balances… but no pending transactions until they are fully processed, which may be days later.

    For comparison, I use another bank (not a Big Four) whose mobile app shows available balance on login and all pending transactions in the list view (with an hourglass indicator) which is SO much more useful; I know at a glance how much money I still really have, and what’s been “paid for” as far as I’m concerned (and that includes direct debits / recurring payments etc).

    As fantastic as having Apple Pay is as a payment method, after trialling it about half a dozen times I’m seriously disappointed in the underlying systems and communications from ANZ’s online side, and probably won’t be using it again until another bank with a more informative mobile app starts offering it. :/
  • Reply 9 of 12
    Love ApplePay.
    But Xander is right. The lack of pending transactions in ANZ's online banking and app is ridiculous. 
  • Reply 10 of 12
    brucemcbrucemc Posts: 1,541member
    Loving Apple Pay on the Watch!  Majority of my purchases have been with it since its launch with major banks last week in Canada (can use contactless payments in most places up to $100).  In my place of work, there are a few food vendors, and while I sometimes don't have my wallet, or even phone on me when moving about, I always have my Watch.  On the downside, I don't have an excuse not to pay anymore...:)
  • Reply 11 of 12
    I would like to use Apple Pay and I would apply for an ANZ card today if they would let me have a $500 limit. I have a separate card at a different institution for Internet payments/purchases which has a $500 limit, but most banks, including ANZ, won't go below $1000.
  • Reply 12 of 12
    laytechlaytech Posts: 300member
    And still the other Aus banks drag their feet... (sigh) really! At least one bank had the courage to break ranks and offer their customers something of value. It's all about profits and as if the other banks don't make enough of it. I feel it must be immanent now though and not before time... I hope. 


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