The Australian Retailers Association (ARA) has come out in support of the group of four Australian banks seeking stronger negotiation powers with Apple over the introduction of Apple Pay in the country, saying they believe access to the NFC functionality in the iPhone would allow retailers to provide “a richer and more convenient customer experience”.
The ARA, which represents 5,000 independent and national retailers, says access to the NFC functionality will allow retailers to “develop or participate in mobile wallets that provided a consistent and fully integrated experience to all users regardless of their choice of smartphones” while also allowing loyalty programs, coupons and rewards to be “more effectively integrated into these mobile wallets”.
“In our view — for as long as Apple Pay remains the only app that can use the iPhone’s NFC functionality — the potential for innovation in mobile wallets and mobile payments will be limited,” the ARA says in a submission to the Australian Competition and Consumer Commission.
“If authorisation is granted, we believe that the opportunity to collectively negotiate with Apple will benefit not only the applicants but all banks, merchants, app developers and, ultimately, customers in Australia and overseas.”
Significant benefit
“Just as Australian consumers have rapidly adopted contactless card payments, the ARA and its members believe that they will in due course rapidly adopt mobile wallets,” the organisation adds.
“Indeed, we cannot emphasise enough the importance of smartphone usage and mobile payments in the future retail experience of Australian consumers.
“We see significant public benefit to the Australian economy of both the further erosion of the use of cash and the greater use of the existing NFC acceptance infrastructure that allows open access to the NFC function on all makes of smartphone.”
In fact, it should be Apple paying the banks and retailers for access to the payments system, not the other way around, Russell Zimmerman, ARA executive director, has told the Australian Financial Review.
Apple Pay boss Jennifer Bailey claimed this week that Australians will be “happy to switch banks” to gain access to Apple Pay and the banks risk “being left behind” by not supporting the service. Australian banks ING Direct and Macquarie also announced support for Apple Pay this week.
Timeline
- 27 July 2016: Bendigo and Adelaide Bank, Commonwealth Bank of Australia, National Australia Bank and Westpac Bank submitted their request for negotiation to the ACCC
- 10 August 2016: Apple spoke out for the first time about the banks’ submission, saying it was made up of “factual and legal misstatements”
- 22 August 2016: The ACCC ruled that it would not grant the banks interim authorization to collectively negotiate
- 30 August 2016: Supermarket giant Coles put its backing behind the banks with its own submission to the ACCC
- 31 August 2016: Apple insisted that opening up access to the NFC technology within its handsets was not open to negotiation with any bank
- 17 October 2016: In an extensive response to the ACCC, the banks criticised Apple’s decision to restrict access to the NFC within its handsets, calling it “completely baseless”
- 29 November 2016: The ACCC denies authorisation to Australian banks over Apple Pay negotiation in a draft determination
- 6 February 2017: Apple accuses Australian banks of Apple Pay transaction fee ‘trojan horse’
- 10 February 2017: ING Direct and Macquarie Bank sign up for Apple Pay
- 10 February 2017: Jennifer Bailey says she believes Australians will be “happy to switch banks” in order to use Apple Pay.
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Come on, guys. You are going to win a Pyrrhic victory. Consumers, not brands, not the issuers, not the merchants, not Apple/Google/Samsung, are going to win this. Align yourselves with your customers, not your competitors.
just support Android then market the feature maybe the people will move over.
One could make a good case that the best thing to do would be to promote Android Pay and Samsung Pay. However, colluding with your competitors against your customers is crazy.
LOL, they think people will switch banks for slightly easier NFC?
Most people won’t even change their morgage to save themselves thousands of dollars.
I agree that Jennifer may be wrong and you right; few will “change banks” to get mobile payments, However, they might open a new credit card account, Issuers should see themselves as lenders first, transaction processors second, To hold their customers hostage in an attempt to force Apple to change a world wide policy is to put hope before reason.
I have used Apple Pay since day one. My “bank” for the purpose is American Express. I like the fact that my credit union has signed on to Apple Pay but I rarely use them for the purpose. My three branch community bank does not support Apple Pay but I would still prefer American Express for mobile payments even of they did.
Are these big holdout banks supporting Samsung Pay?