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The Australian Competition and Consumer Commission has issued a final determination denying Australian banks permission to collectively bargain with Apple and boycott Apple Pay, saying it is concerned it would reduce and distort competition.
Commonwealth Bank, Westpac, NAB and Bendigo Bank sought to bargain with Apple for access to its Near-Field Communication (NFC) technology in iPhones and "reasonable access terms" to the iTunes App Store.
That would allow the banks to offer their own digital wallets to iPhone users in competition with Apple Pay.
The decision means customers of those banks will remain without access to touch-and-go payments on their iPhones until each bank reaches an agreement with Apple individually.
The ACCC said it accepted Apple providing the banks access to the iPhone NFC controller would likely lead to increased competition and that is a significant benefit, but there were three main disadvantages it identified:
- Apple's competition with Google would be impacted in terms of mobile payments
- Digital wallets and mobile payment technology remains nascent and subject to rapid change, so it is uncertain how competition may develop
- Apple Pay and other multi-issuer digital wallets would increase competition between the banks by making it easier for consumers to switch between card providers and limit "lock-in" effects some bank digital wallets may cause
"The ACCC is not satisfied, on balance, that the likely benefits from the proposed conduct outweigh the likely detriments," ACCC chairman Rod Sims said in a statement.
In a collective statement, the four banks behind the applications said they would individually review and determine their future strategy for mobile wallets and payments.
"We are disappointed that the finely balanced draft determination was not tipped in the final decision, given our considerable effort to demonstrate the public benefits inherent in open NFC access, and the subsequent flow-on benefits for mobile wallet innovation and competition in Australia," spokesperson for the banks, Lance Blockley said in a statement.
"Apple has a stated desire to own the entire mobile wallet, and will use the beachhead into mobile wallets afforded to them by complete control over mobile payments on iPhone to exert control over the rest of the digital wallet. This is aimed at increasing the services revenue they can earn from iPhone users."
ANZ already offers Apple Pay to its customers after striking a deal with Apple in April 2016.
The ACCC had consultations with consumers, financial institutions, retailers and technology companies over the matter.
Apple has welcomed the decision, and said 3,500 banks in 15 markets currently use Apple Pay.
"We look forward to continuing to work with individual banks in Australia," the company said in an email to ABC News.
Topics: company-news, consumer-finance, consumer-protection, regulation, multinationals, science-and-technology, australia
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