ACCC draft determination denies Australian banks' bid to bargain or boycott Apple Pay

Posted:
in General Discussion edited November 2016
In a draft determination issued on Tuesday local Australia time, the Australian Competition and Consumer Commission denied the country's big-three banks authorization to collectively negotiate access to Apple Pay NFC technology.




The "finely balanced" ACCC determination speaks to the future of digital wallets in Australia and follows months of back-and-forth arguments between the country's "big three" banks and Apple.

Today's proposal denies an application to negotiate terms regarding Apple Pay deployment and services lodged by the Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corp, along with Bendigo and Adelaide Bank, in July.

A number of contingencies were included in that request to bargain, chief among them being access to iPhone's NFC controller. With access to vital communications hardware the banks would be able to field their own digital wallet systems on iPhone devices, a move they argued would bring competition to the space.

In addition, the request asked permission to negotiate a potential removal or modification of restrictions that prohibits financial institutions from passing Apple Pay transaction fees to consumers.

"This is currently a finely balanced decision. The ACCC is not currently satisfied that the likely benefits from the proposed conduct outweigh the likely detriments," said ACCC Chairman Rod Sims. "While the ACCC accepts that the opportunity for the banks to collectively negotiate and boycott would place them in a better bargaining position with Apple, the benefits are currently uncertain and may be limited."

The banks in a statement to AppleInsider promised to work with the ACCC to address issues raised in the draft determination to provide competition and choice for their customers. If the proposal stands, Australian iPhone owners will have only one mobile wallet option -- Apple Pay -- while the Australian payments industry will be denied the opportunity to innovate and compete with Apple, the banks contend.

"If the draft determination of the Australian competition regulator stands, effectively there will be no competition against Apple for mobile payments on the iPhone," said Lance Blockley, a payments specialist and speaking on behalf of the bank collective. "The application has never been about preventing Apple Pay from coming to Australia or reducing competition between wallets. It has always been about providing consumer choice and innovation."

Backing the banks are filings in support of joint negotiations from various retailers and payments associations dating back to August.

The ACCC complaint was lodged eight months after Apple Pay launched in Australia last November through a limited partnership with American Express. Major bank ANZ was first to break rank and partner with Apple in April.

For its part, Apple called the banks' threatened boycott a detriment to consumer choice that would ultimately hinder mobile wallet adoption and innovation. The banks, Apple says, are looking to stall consumer adoption of Apple Pay and other mobile wallet solutions with onerous authorization stipulations, a process that stifles competition.

While the parties have yet to reach an amicable agreement over Apple Pay, the ACCC notes banks can already offer digital wallet solutions on iPhone without accessing the NFC module, through their own apps with Apple Pay integration, or with the use of NFC tags. Further, banks can choose to offer similar payments services on Google's Android operating system.

Contrary to the banks' argument for negotiations, the Australian antitrust watchdog has determined Apple Pay might actually spur competition in the burgeoning digital payments space.

"Apple Wallet and other non-bank digital wallets could represent a disruptive technology that may increase competition between the banks by making it easier for consumers to switch between card providers and limiting any 'lock in' effect bank digital wallets may cause," Sims said.

The ACCC will continue to accept submissions on its draft determination and is prepared to consult with interested parties as well as applicants. A conference might also be called to hear oral arguments regarding the draft decision. The ACCC expects to reach a final decision in March 2017
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Comments

  • Reply 1 of 34
    The banks sound like a bunch of fake capitalists asking for a bailout when they lack any cards to play. Let them develop their own payment systems if they don't like Apple's terms.
    edited November 2016 Solimacstarwatto_cobrajbdragon
  • Reply 2 of 34
    The Australian banks were wolves trying to shoehorn their profit-seeking business plans into a sheep's clothing of consumer advocacy. I for one are glad that the ACCC saw through this utterly pathetic attempt to keep the market locked down to the big banks.
    wookie01Solilostkiwientropysmacstarjony0watto_cobradonaldchumpjbdragon
  • Reply 3 of 34
    sennensennen Posts: 1,465member
    Good news. Australian banks, ie. the 'Big Four', already have too much power as it is. Looking forward to the inevitable Royal Commission.
    lostkiwiwatto_cobradonaldchump
  • Reply 4 of 34
    MacProMacPro Posts: 18,260member
    I think they have this all upside down ... oh wait ...
    revenantroundaboutnowfotoformatentropysfracicoco3jbdragonjony0watto_cobraSpamSandwich
  • Reply 5 of 34
    I think they have this all upside down ... oh wait ...
    I see what you did there.
    melodyof1974watto_cobra
  • Reply 6 of 34
    As it will be a loss of business that forces the Australian banking cartel to finally offer Apple Pay, it would be interesting to know how many customers have changed banks or, if not moving, have stopped using the bank issued cards in favor of Amex. 

    Now, if only the Swiss banking cartel would fold that would be a key victory. 
    wookie01lostkiwientropysjbdragonwatto_cobra
  • Reply 7 of 34
    "If the draft determination of the Australian competition regulator stands, effectively there will be no competition against Apple for mobile payments on the iPhone,"

    Bull. You can pay on your mobile phone multiple ways: type in a credit card number, use PayPal, etc. Apple's solution is just faster, easier, and more secure. That's innovation, and Apple deserves to profit from that innovation.
    wookie01mattinozlostkiwicoolfactorentropysmelodyof1974jbdragonjony0watto_cobra
  • Reply 8 of 34
    I'm an ANZ customer using Apple Pay everywhere that payWave is offered in Australia and it's a breeze (with the watch). 
    I hope the other scumbags are hemoraging customers and money
    EsquireCatsdouglas baileylostkiwientropysgtrjbdragonbrucemcjony0watto_cobraSpamSandwich
  • Reply 9 of 34
    I think they have this all upside down ... oh wait ...
    I see what you did there.
    ˙ooʇ ǝɹǝɥʇ pᴉp ǝɥ ʇɐɥʍ ʍɐs I
    macseekerdouglas baileyRayz2016coolfactorentropysgtr[Deleted User]melodyof1974jbdragonjony0
  • Reply 10 of 34
    iqatedoiqatedo Posts: 1,599member
    wookie01 said:
    I'm an ANZ customer using Apple Pay everywhere that payWave is offered in Australia and it's a breeze (with the watch). 
    I hope the other scumbags are hemoraging customers and money
    What is your experience with ANZ's iOS offerings (mobile banking)? Bankwest (Commonwealth) for example, is excellent but of course, no ApplePay. 
  • Reply 11 of 34
    Excellent outcome. This was a piece of b-s lawsuit to begin with. 

    Damn, I wish we could import Australia's judicial system for it speed, sense, and efficiency. 
    edited November 2016 lostkiwi
  • Reply 12 of 34
    anomeanome Posts: 1,270member
    Excellent outcome. This was a piece of b-s lawsuit to begin with. 

    Damn, I wish we could import Australia's judicial system for it speed, sense, and efficiency. 


    This isn't the judicial system, it's just the Australian Competition and Consumer Commission. Results from them don't necessarily reflect the rest of the legal system.

    I don't see the "competition" argument holding. People don't have to buy an iPhone, and they don't have to use Apple Pay if they have an iPhone. They can pay with just their credit card. You might as well argue that clients ought to be able to use the Westpac App to access their Commonwealth Bank accounts.

    mattinozSolilostkiwicoolfactorstompybrucemc
  • Reply 13 of 34
    iqatedo said:
    wookie01 said:
    I'm an ANZ customer using Apple Pay everywhere that payWave is offered in Australia and it's a breeze (with the watch). 
    I hope the other scumbags are hemoraging customers and money
    What is your experience with ANZ's iOS offerings (mobile banking)? Bankwest (Commonwealth) for example, is excellent but of course, no ApplePay. 
    I use the ANZ Go app which has all my linked accounts. Allows transfers between accounts, BPAY, pay anyone, you can even send payments to a mobile (I haven't used that). It doesn't support Touch ID ( uses a pin ). There is another more extensive app ANZ Grow that I don't use which combines banking, investment, super, insurance and it does support Touch ID. Overall I'm pretty happy with the offerings. 
    lostkiwiwatto_cobradonaldchump
  • Reply 14 of 34
    mattinozmattinoz Posts: 1,069member
    Excellent outcome. This was a piece of b-s lawsuit to begin with. 

    Damn, I wish we could import Australia's judicial system for it speed, sense, and efficiency. 
    Don't worry our actual courts are still the slow lumbering bungling beasts that your probably use to.


    watto_cobra
  • Reply 15 of 34
    My partner and I switched to ANZ because of Apple Pay.  Paying for things using the phone (and her watch) at the checkout has been a revelation.  I often don't carry my physical credit cards out anymore.  It is probably the most useful and important Apple technology since the original iPhone.  I can't believe the other banks are so stupid as to be bleeding customers to ANZ left right and centre over this...
    lostkiwientropyswatto_cobradonaldchump
  • Reply 16 of 34
    I think they have this all upside down ... oh wait ...
    I see what you did there.
    ˙ooʇ ǝɹǝɥʇ pᴉp ǝɥ ʇɐɥʍ ʍɐs I
    Nice! I put in an upside down smiley but it was ignored. :(
    watto_cobra
  • Reply 17 of 34
    iqatedo said:
    wookie01 said:
    I'm an ANZ customer using Apple Pay everywhere that payWave is offered in Australia and it's a breeze (with the watch). 
    I hope the other scumbags are hemoraging customers and money
    What is your experience with ANZ's iOS offerings (mobile banking)? Bankwest (Commonwealth) for example, is excellent but of course, no ApplePay. 
    I also switched to ANZ, the day they got ApplePay. The app is very good except that it does not currently list pending authorizations. I personally find this frustrating because I can see that my available balance has been reduced but can't see the specifics of the transactions that have reduced it until they process a few days later.

    You'd think I could track my own transactions? But what am I paying the bank for? (I actually have a few unpredictable Direct Debits.)

    Anyway, I hear they have recently finished an upgrade of their back end systems so I hope they can add this feature soon. + TouchID on their Go Money App.,
    entropyswatto_cobradonaldchump
  • Reply 18 of 34
    iqatedo said:
    wookie01 said:
    I'm an ANZ customer using Apple Pay everywhere that payWave is offered in Australia and it's a breeze (with the watch). 
    I hope the other scumbags are hemoraging customers and money
    What is your experience with ANZ's iOS offerings (mobile banking)? Bankwest (Commonwealth) for example, is excellent but of course, no ApplePay. 
    I also switched to ANZ, the day they got ApplePay. The app is very good except that it does not currently list pending authorizations. I personally find this frustrating because I can see that my available balance has been reduced but can't see the specifics of the transactions that have reduced it until they process a few days later.

    You'd think I could track my own transactions? But what am I paying the bank for? (I actually have a few unpredictable Direct Debits.)

    Anyway, I hear they have recently finished an upgrade of their back end systems so I hope they can add this feature soon. + TouchID on their Go Money App.,
    Are you entering the card into the wallet app?  That's the way to go.  I personally don't use the ANZ app.
    watto_cobra
  • Reply 19 of 34
    "If the draft determination of the Australian competition regulator stands, effectively there will be no competition against Apple for mobile payments on the iPhone," said Lance Blockley, a payments specialist and speaking on behalf of the bank collective. "The application has never been about preventing Apple Pay from coming to Australia or reducing competition between wallets. It has always been about providing consumer choice and innovation."

    The ACCC will continue to accept submissions on its draft determination and is prepared to consult with interested parties as well as applicants. A conference might also be called to hear oral arguments regarding the draft decision. The ACCC expects to reach a final decision in March 2017
    Good draft decision from the ACCC.  I hope it stands in the final report, as the flow on effect will impact us here in NZ.

    You know whenever you hear a government or corporate official start blathering about "choice" and sometimes "innovation" it means they are trying to screw the public over. The end result is generally the complete opposite.  PR codewords.
    entropys
  • Reply 20 of 34
    Fuck em I say. I'm with the only Australian bank that has adopted Apple Pay and I use it every time I make a purchase. Every shop in Australia accepts Apple Pay. 
    gtriqatedolostkiwiwatto_cobra
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