Fat lot of good it'll do these banks to be granted collective bargaining rights. Tim Cook will smile as he tells all three at the same time, "No, you cannot have access to the NFC chip. Next question." Makes the whole process that much more efficient for him as he wont need to say it three times.
On the surface I think Canada and Australia have similar banking markets (big national banks are protected, limited competition, mostly in online services). However, Apple Pay came here with relatively little pain it would seem (other than being delayed, which in some part was due to complexity of integrating with the Interac system). The Big 5 banks all signed on without little public complaints, other than disagreement over the rates Apple would get vs. US (all rumoured of course since nothing is public).
Strange that Australia then is being one of the toughest markets for Apple Pay to enter.
I have used Apple Pay a couple of times in the week since I got my card and have found it seamless and faster than paying with the card itself (which surprised me somewhat). The only reason I haven't used it more is I don't always take my phone with me. The CBA lost my mortgage this week (not to ANZ) and my credit business. I reckon more people will swap their credit card to ANZ once the word gets out.
Curse the first person to realize that having access to you're customer's private and personal information is economically advantageous, screwed us all in the back side, the bustard
This is nothing about access or customer experience, it's all about price.
Next year the Reserve Bank of Australia (RBA), Australia's version of the Fed, will cap credit card merchant fees at 80bps with a weighted average of 50bps. The US average is around 200bps.
I've read that Apple is looking to take roughly 15bps per transaction which would 'take' roughly 30% of the merchant fee that the banks get (based on weighted average). I don't think ANY business would give up 30% of their REVENUE. However lets just say they do, can a bank extend a generous rewards scheme AND 55 days interest free for 35bps?.. I know some will say that the banks charge the consumer 20% interest so 35 bps doesn't matter, but the simply most businesses and credit card consumers do actually pay of their card on time and in full, so the 35bps is significant.
So why have ANZ and Amex chosen to be included? 1. Amex remains unregulated as merchants choose to accept their card and therefore Amex charges what they like. I'm sure that 15bps of 3% is easy for them to swallow. 2. ANZ is interesting... Is it a coincidence that the Head of Apple Pay Australia use to be Head of cards at ANZ?.. Was there special pricing given due to this? Combine this with domino theory, get one and the rest will fall?.. Who knows. What is known is that ANZ is the 'smallest' credit card issuer of the big 4 in Australia. This probably means that it's a customer acquisition play more than anything. Apple knew this due to their head being formerly employed by ANZ and used this as leverage.
I don't think The ACCC, the Banks or Apple are going to budge on this one, there's AU$27B at stake.
So, either get an Amex card or open an ANZ account (and give ANZ what they wanted after all, a new customer) and start using Apple Pay.
I would be careful about accusations of collusion there. More like it is market acquisition ploy. It worked for me regardless, and I now have an ANZ card.
I've read that Apple is looking to take roughly 15bps per transaction which would 'take' roughly 30% of the merchant fee that the banks get (based on weighted average). I don't think ANY business would give up 30% of their REVENUE.
Actually Apple already negotiated a significantly lower surcharge than 15bps in the UK. Considering credit card fees are far smaller in both the UK and Australia than in the USA, the rate Apple is expecting from Aussie banks is absolutely lower than that as well.
Make no mistake about it, this is the Aussie Banks wanting to own and control the whole enchilada while Apple understands that opening up the NFC chip, the Secure Element and the TouchID biometric authentication sensor for potentially poorly coded proprietary financial apps from thousands of Banks and financial institutions worldwide running in the background all the time soaking up CPU and RAM is the last thing that Apple users want.
I, like thousands of other Aussies have now signed up for an ANZ credit card so I can start paying for everything with a tap of the Apple Watch on my wrist. With Apple capturing 38-45% quarterly smartphone market share in Australia, just wait until the other Big 3 banks give in and provide Aussie customers what they want before they lose all their customers to the ANZ. It's hilarious that the Banks think Apple customers are more loyal to them rather than Apple.
Comments
Strange that Australia then is being one of the toughest markets for Apple Pay to enter.
Next year the Reserve Bank of Australia (RBA), Australia's version of the Fed, will cap credit card merchant fees at 80bps with a weighted average of 50bps. The US average is around 200bps.
http://www.rba.gov.au/payments-and-infrastructure/review-of-card-payments-regulation/conclusions-paper-may2016/interchange-fees-and-transparency-of-card-payments.html
I've read that Apple is looking to take roughly 15bps per transaction which would 'take' roughly 30% of the merchant fee that the banks get (based on weighted average). I don't think ANY business would give up 30% of their REVENUE. However lets just say they do, can a bank extend a generous rewards scheme AND 55 days interest free for 35bps?.. I know some will say that the banks charge the consumer 20% interest so 35 bps doesn't matter, but the simply most businesses and credit card consumers do actually pay of their card on time and in full, so the 35bps is significant.
So why have ANZ and Amex chosen to be included?
1. Amex remains unregulated as merchants choose to accept their card and therefore Amex charges what they like. I'm sure that 15bps of 3% is easy for them to swallow.
2. ANZ is interesting... Is it a coincidence that the Head of Apple Pay Australia use to be Head of cards at ANZ?.. Was there special pricing given due to this? Combine this with domino theory, get one and the rest will fall?.. Who knows.
What is known is that ANZ is the 'smallest' credit card issuer of the big 4 in Australia. This probably means that it's a customer acquisition play more than anything. Apple knew this due to their head being formerly employed by ANZ and used this as leverage.
I don't think The ACCC, the Banks or Apple are going to budge on this one, there's AU$27B at stake.
So, either get an Amex card or open an ANZ account (and give ANZ what they wanted after all, a new customer) and start using Apple Pay.
Make no mistake about it, this is the Aussie Banks wanting to own and control the whole enchilada while Apple understands that opening up the NFC chip, the Secure Element and the TouchID biometric authentication sensor for potentially poorly coded proprietary financial apps from thousands of Banks and financial institutions worldwide running in the background all the time soaking up CPU and RAM is the last thing that Apple users want.
I, like thousands of other Aussies have now signed up for an ANZ credit card so I can start paying for everything with a tap of the Apple Watch on my wrist. With Apple capturing 38-45% quarterly smartphone market share in Australia, just wait until the other Big 3 banks give in and provide Aussie customers what they want before they lose all their customers to the ANZ. It's hilarious that the Banks think Apple customers are more loyal to them rather than Apple.