Apple’s claim that allowing access to the NFC technology within its iPhones would diminish the security of Apple Pay has been branded “completely baseless” by a group of four Australian banks, who are seeking greater powers of negotiation over the entry of third-party mobile wallets in the country.
Bendigo and Adelaide Bank, Commonwealth Bank of Australia, National Australia Bank and Westpac Bank submitted their request for negotiation to the Australian Competition and Consumer Commission (ACCC) in July, urging Apple to open access to the NFC technology within its handsets to let other mobile payment providers launch NFC mobile payment services on iPhone handsets.
Apple spoke out for the first time about the banks’ submission in August, saying it was made up of “factual and legal misstatements” and would “harm consumers, lead to less competition and less innovation, and create a troubling precedent” if granted.
It insisted that opening up access to the NFC technology within its handsets is “not open to negotiation with any bank.”
In an extensive response to the ACCC published this week, the banks criticise Apple’s “superficial and unconvincing” arguments against their demand for collective negotiation, adding they wanted to “offer customers a real choice of mobile payments whichever mobile platform they choose”.
“By locking out any independent access to the NFC function on iOS devices, Apple is seeking for itself the exclusive use of Australia’s existing NFC terminal infrastructure for the making of integrated mobile payments using iOS devices,” the banks say.
“Yet this infrastructure was built and paid for by Australian banks and merchants for the benefit of all Australians. Apple’s claim that providing the applicant’s access to the NFC function would undermine security or customer experience is completely baseless.”
“Apple suggests the applicants wish to blunt or delay Apple Pay and its entry into Australia, and to slow innovation and reduce competition,” the banks continue. “This is exactly backwards. The applicants are under intense pressure to participate in Apple Pay and risk losing customers to other issuers who offer Apple Pay before them.
“They wish to commence and conclude collective negotiations and offer Apple Pay to their customers as quickly as possible.”
“Our application remains focused on providing Australian consumers with real choice and better outcomes for mobile payments, mobile wallets and a range of other potentially NFC-powered functions such as public transport, airlines, store loyalty and rewards programs, and many more applications yet to be developed,” says Lance Blockley, a spokesperson on behalf of the four banks.
“This is about the future of mobile payments in Australia — will it be Apple’s way or no way, or a genuine level playing field so all consumers can have the best digital services, no matter what device they own.”
Apple Pay launched in Australia in November 2015 with support from American Express. The company met with resistance from the banks before ANZ became the first of the country’s big four to add support for the service in April 2016.
Supermarket giant Coles recently put its backing behind the banks with its own submission to the ACCC, which would not grant the banks interim authorization to collectively negotiate in August.