Apple counters Australian banks' call for iPhone NFC access, cites handset security
Rebuking overtures from Australia's big-three banks looking to break in on Apple Pay's success, Apple in a letter to the Australian Competition and Consumer Commission this week said requests for access to iPhone's digital wallet technology would fundamentally undermine the handset's security safeguards.
Apple went further in its three-page letter to the ACCC, likened the three banks -- Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corp -- to a cartel that wants to suppress new, potentially disruptive financial market innovations, reports The Australian Financial Review.
In July, Australia's three biggest lenders filed an ACCC application seeking approval to collectively negotiate the installation of third-party digital wallets on iPhones. Currently, Apple restricts touchless NFC payments to its in-house Apple Pay solution, a limitation the company says is meant to protect consumers.
"Apple upholds very high security standards for our customers when they use Apple devices to make payments," Apple said in its statement to the ACCC. "Providing simple access to the NFC antenna by banking applications would fundamentally diminish the high level of security Apple aims to have on our devices."
For their part, the banks claim compatibility with third-party digital wallet software will give consumers choice beyond Apple Pay, adding that Apple's single-source solution amounts to anticompetitive behavior.
Apple's letter asserts much the same, but in reverse.
"Unfortunately, and based on their limited understanding of the offering, the [banks] perceive Apple Pay as a competitive threat," Apple's statement reads. "These banks want to maintain complete control over their customers. The present application is only the latest tactic employed by these competing banks to blunt Apple's entry into the Australian market."
Interestingly, the document was signed by Marg Demmer, a former executive at ANZ Banking Group. In April, ANZ became the first major Australian bank to break rank and ink a deal to bring Apple Pay to its customers, a decision that drove a 20 percent increase in online credit card and deposit account applications.
Apple continues to negotiate with Australia's banks in light of the proposed Apple Pay boycott. Apple said it needs support from the big-three institutions in order to roll out Apple Pay on a "meaningful" basis, but the company appears to be facing an uphill battle.
Apple went further in its three-page letter to the ACCC, likened the three banks -- Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corp -- to a cartel that wants to suppress new, potentially disruptive financial market innovations, reports The Australian Financial Review.
In July, Australia's three biggest lenders filed an ACCC application seeking approval to collectively negotiate the installation of third-party digital wallets on iPhones. Currently, Apple restricts touchless NFC payments to its in-house Apple Pay solution, a limitation the company says is meant to protect consumers.
"Apple upholds very high security standards for our customers when they use Apple devices to make payments," Apple said in its statement to the ACCC. "Providing simple access to the NFC antenna by banking applications would fundamentally diminish the high level of security Apple aims to have on our devices."
For their part, the banks claim compatibility with third-party digital wallet software will give consumers choice beyond Apple Pay, adding that Apple's single-source solution amounts to anticompetitive behavior.
Apple's letter asserts much the same, but in reverse.
"Unfortunately, and based on their limited understanding of the offering, the [banks] perceive Apple Pay as a competitive threat," Apple's statement reads. "These banks want to maintain complete control over their customers. The present application is only the latest tactic employed by these competing banks to blunt Apple's entry into the Australian market."
Interestingly, the document was signed by Marg Demmer, a former executive at ANZ Banking Group. In April, ANZ became the first major Australian bank to break rank and ink a deal to bring Apple Pay to its customers, a decision that drove a 20 percent increase in online credit card and deposit account applications.
Apple continues to negotiate with Australia's banks in light of the proposed Apple Pay boycott. Apple said it needs support from the big-three institutions in order to roll out Apple Pay on a "meaningful" basis, but the company appears to be facing an uphill battle.
Comments
F*ck the f*cking banks.
Its great ANZ broke ranks, there is hope yet.
I'm not siding with the banks here but you're making it sound as if Apple owns all rights to the NFC payment's token tech, which they do not.
The other 3 big banks have requested from the ACCC 3 YEARS to work together as a cartel to negotiate against Apple.
For those of you waiting, for CommBank, Westpac, NAB to get ApplePay, it's 2 weeks before the ACCC gives it's interim decision. Then I think another 5 months before it will give it's 'considered' decision. Then, if they say 'Yes', do we really think Apple will open up their NFC before they are good and ready? And would you expect, when you hold a locked iPhone up to an EFTPOS terminal that it's going to open a banks app or it's going to open the Apple Wallet app? If the ACCC say 'no', I wonder if the banks would stall on ApplePay out of pride. They could just cave immediately but we're still talking at least 5.5 months away.
I encourage you not to wait. I don't work for ANZ, I'm a fan of ApplePay and I think the banks stalling on it should be made to feel the pain of customers switching for it. I can't wait till a huge number of people are using mobile as wallets and putting pressure on other companies to make their cards digital (i.e. Driver Licence).
The more people who make the switch the bigger message it will send to the banks that they have to provide the services the consumers want and not just doing what is best for their bottom line.
Correction - It's great for us as consumers. I don't want to have to unlock my phone and open a banking app before I can pay for something. The ApplePay solution allows me to make a payment from the lock screen by simply holding my thumb on the Home button. Why would I want the banks to come up with their own more convoluted method when Apple already provides what I want. These three banks don't care about what's best for the consumer, they care about what's best for them.
People often misunderstood that Apple Pay is only NFC chip. What Apple protect here is their implementation of transaction or surprise, consumer's security. If you read how Apple Pay works, Apple has no access to transaction whatsover. Bank still keeping the controls of all transaction and tokenization. Apple simply play as a conduit, but a very secure conduit, compare to Samsung Pay. Which is why I stated, by giving away that particular control to bank, Apple is jeopardizing consumer's security, not something that Apple design Apple Pay for.