Australian banks denied interim approval to negotiate over Apple Pay

Posted:
in iPhone edited August 2016
An Australian antitrust regulator on Friday temporarily denied a request from the country's three largest banks to collectively negotiate with Apple over the installation of third-party digital wallet software on iPhones.




The Australian Competition and Consumer Commission noted that the interim ruling has little bearing on a full decision currently scheduled for October, Reuters reports. Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corp in July lodged a request for interim authorization from the ACCC as it awaits a formal ruling.

"However, given the complexity of the issues and the limited time available, the ACCC has decided not to grant interim authorisation at this time," said ACCC Chairman Rod Sims. "The ACCC requires more time to consult and consider the views of industry, consumers, and other interested parties."

The banks are collectively looking to negotiate terms under which Apple would allow installation of third-party digital wallet apps onto iPhone hardware, a process that requires access to the handset's NFC technology. Citing consumer safety, Apple restricts touchless NFC payments technology to its own in-house Apple Pay solution on all compatible devices. This limitation amounts to anticompetitive behavior, the banks argue.

In a response to the ACCC earlier this month, Apple said the banks' request to negotiate comes down to competition.

"Unfortunately, and based on their limited understanding of the offering, the [banks] perceive Apple Pay as a competitive threat," Apple said. "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."

All three banks pushing for access to iPhone's NFC tech have not yet signed on to offer Apple Pay to their customers. ANZ, the only big-four Australian bank to break rank and ink a deal with Apple, saw a 20 percent increase in online credit card and deposit account applications after rolling out Apple Pay support.
lostkiwi
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Comments

  • Reply 1 of 27
    kevin keekevin kee Posts: 1,291member
    At least someone did his homework.
    Deelronlostkiwi
  • Reply 2 of 27
    SpamSandwichSpamSandwich Posts: 33,407member
    Good for ANZ.
    douglas baileylollivermacseekerlatifbplostkiwientropyscharlesatlas
  • Reply 3 of 27
    lolliverlolliver Posts: 451member

    Rejecting the interim request is at least a start. I'm not sure though that these three banks will even wave the white flag if their request is rejected by the formal ruling in October. They are greedy and power hungry and I suspect will only change course if their refusal to support Apple Pay starts to have a big enough impact on their bottom line.

    Hopefully the number of customers moving from these three banks to ANZ in order to gain access to Apple Pay will start to have an impact on their decision making. Would also be great if some of the smaller banks, building societies and credit unions were able to support Apple Pay soon.

    douglas baileyDeelronlostkiwientropysbigjony0topper24hours
  • Reply 4 of 27
    It's a draft (not full) decision in Oct. 
    Then there's consultation around the draft and the full decision 2-3 months later.

    As per ACCC release.
    lolliver
  • Reply 5 of 27
    Fascinating. From my outside-of-Austrialia viewpoint, this seems like a mafia move. Or maybe even collusion against a competitor. Both are a bit hyperbolic, I guess, but not entirely.

    My understanding is: these three banks want to implement their own form of ApplePay on the iPhone. Pretty sure Mr. Cook will tolerate this as much as he tolerated the FBI's backdoor into the iPhone.
    lolliverlostkiwiradiospacebigradarthekatjony0topper24hours
  • Reply 6 of 27
    analogjackanalogjack Posts: 1,073member
    Brilliant move by ANZ which by a small but significant measure goes against the grain of bank solidarity in greed. Labor will increasingly push for a Royal Commission which is being fiercely resisted by our ex Banker PM.
    latifbpanomelostkiwibigjony0
  • Reply 7 of 27
    Can we import the Australian judicial system here?
    lolliver
  • Reply 8 of 27
    If they force Apple based on open competition, then maybe Apple should enter the Credit Card Business. Apple could keep 30% of the charge credit card usually charge the store and we would get 70% of it :-) 
    latifbpradarthekat
  • Reply 9 of 27
    Some of my Aussie friends are looking forward to ApplePay. Also the state of NSW is exploring ways for storing a driver's license on one's smartphone. Ref: http://www.theaustralian.com.au/business/technology/nsw-digital-drivers-licence-scheme-faces-obstacles/news-story/44a09d438c52951a5e530378a7bb68ce For the average Aussie, all they need to carry around is their smartphone.
    lolliverdouglas baileybig
  • Reply 10 of 27
    EsquireCatsEsquireCats Posts: 1,243member
    What's the bet that another bank will sign on before the ACCC release their decision.

    Let's also be clear, these banks are not worthy of any kind of sympathy - there is a reason why Australia has the ACCC and that's to keep a lid on some of the typical corruption behaviours in many different business sectors.

    Banks are a ripe example of such abuses. Along with several other banks, currently the largest 4 banks  are being sued by US hedge funds over possible manipulations of the bank bill swap rate, this comes not long after Australia's own investment securities regulator has filed legal action against the lenders, and the banks announcing record profits despite the local and global markets not being in any particular state to yield such extravagant figures.
    edited August 2016 kitatitlolliverpatchythepiratelostkiwidouglas baileymagman1979radiospaceDeelrongedboy58entropys
  • Reply 11 of 27
    ClexClex Posts: 3member
    Apple said. "These banks want to maintain complete control over their customers."
    That sounds like the same thing Steve Jobs said about Apple products. He wanted complete control over the customer experience. 
    singularitycnocbui
  • Reply 12 of 27
    anomeanome Posts: 1,481member
    What's the bet that another bank will sign on before the ACCC release their decision.

    Let's also be clear, these banks are not worthy of any kind of sympathy - there is a reason why Australia has the ACCC and that's to keep a lid on some of the typical corruption behaviours in many different business sectors.

    And it's also why the LNP are likely to try and stuff the ACCC at some point. As noted above, the current PM was a banker.

    It's unlikely that any of the Big (4-1) will suddenly sign on. Then again, they're already in trouble over the last interest rate cut (and not passing it on to consumers), so they may soften over time to try and recover their public approval. Some of the Building Societies might sign on, though. Especially if they see it as a way to chip away at the banks.

    In the meantime, I'm paying for most stuff with my AmEx, where I can. Still working fine, so far.

    lolliverbig
  • Reply 13 of 27
    paxmanpaxman Posts: 4,707member
    Clex said:
    Apple said. "These banks want to maintain complete control over their customers."
    That sounds like the same thing Steve Jobs said about Apple products. He wanted complete control over the customer experience. 
    'Completely control over the customer' and 'complete control over the customer experience' are not really the same.
    lolliverdouglas baileyrotateleftbyteprolineradiospaceDeelrongedboy58iqatedobignolamacguy
  • Reply 14 of 27
    I think it's great that these banks want to compete with Apple in offering their own mobile payment system.  Now they just need to get to work designing a phone and a mobile operating system to host their proprietary solution.
    bigholyone
  • Reply 15 of 27
    iqatedoiqatedo Posts: 1,746member
    If they force Apple based on open competition, then maybe Apple should enter the Credit Card Business. Apple could keep 30% of the charge credit card usually charge the store and we would get 70% of it :-) 
    That's the point. From a consumer point of view, ApplePay is a partnership between banks and Apple to provide secure transactions that the banks can't seem to manage on their own.
  • Reply 16 of 27
    evilutionevilution Posts: 1,398member
    So, these banks think that Apple pay is going to be a competitive threat. FFS, Apple is working with you, not against you.
    Customers are still using your cards but from a phone.
    Obviously these banks aren't interested in customer security or reducing fraud.
    brucemc
  • Reply 17 of 27
    entropysentropys Posts: 3,509member

    And it's also why the LNP are likely to try and stuff the ACCC at some point. As noted above, the current PM was a banker
    There are plenty of reasons to shaft the useless ACCC that have nothing to do with banks. Name one decision of the ACCC in the last five years that has been effective or timely. Mr Sims has a good life though.  And Turnbull will support an RC into the banks even if he doesn't have a clue why. and he wasn't a banker, btw. Just another bloody corporate lawyer.

    for our foreign friends, the banks have applied to the ACCC to bargain collectively with Apple.  The ACCC is able to do this, and often does with groups like chook farmers or dairy farmers who are only able to deal with a single processor. The banks want to do what the publishers were accused of in the iBooks case.

    That the banks are trying this on, arguing their case is similar is laughable. But of course the useless ACCC couldn't give it the treatment it deserved and toss it immediately,  because the ACCC want the treatment they believe they deserve, preferably for as long as possible. mr Sims has got to eat. Well.
    edited August 2016
  • Reply 19 of 27
    bigbig Posts: 36member
    Disclosure: I'm in the USA.

    I've been lurking here for several years and finally feeling bold enough to speak up. I love the quality of debate on this site!

    My $0.02 is that ever since the greedy banks destroyed my country's economy in 2008, I have zero (0) trust in the banks. Period. Having said that, and I'm a remote armchair observer, ANZ seems to be doing the right thing.

    I'm too tired to look into the numbers - it's about 1:30 am here - but I suspect if these other Australian banks won't play ball due to their greed and desire for monopoly, it's probably not even worth doing business in Australia. Which is a shame for the Australian folks - I've had great experiences with Apple Pay. 
  • Reply 20 of 27
    What's the bet that another bank will sign on before the ACCC release their decision.

    Let's also be clear, these banks are not worthy of any kind of sympathy - there is a reason why Australia has the ACCC and that's to keep a lid on some of the typical corruption behaviours in many different business sectors.

    Banks are a ripe example of such abuses. Along with several other banks, currently the largest 4 banks  are being sued by US hedge funds over possible manipulations of the bank bill swap rate, this comes not long after Australia's own investment securities regulator has filed legal action against the lenders, and the banks announcing record profits despite the local and global markets not being in any particular state to yield such extravagant figures.
    I do not doubt what you have written. It makes me laugh. US hedge funds having the audacity to sue over possible manipulations is truly a "pot calling kettle" endeavor. Hedge funds manipulate the US stock market every day without the SEC stepping in to sue them for their illegal activities.
    big
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