Australia's banks have argued in their joint response to the Australian Competition and Consumer Commission (ACCC) that Apple's arguments against collectively negotiating with banks on accessing its mobile payments app Apple Pay due to security concerns are "unconvincing" and "superficial". The Commonwealth Bank of Australia, National Australia Bank, Westpac Bank, and Bendigo and Adelaide Bank have been seeking regulatory approval to collectively negotiate with third-party mobile providers such as Apple on conditions relating to competition, best practice standards, and efficiency. Specifically, they want non-exclusive access to the near-field communication (NFC) chip, standardised security for all mobile payments systems, and price transparency on transaction costs within Australia -- the last of which is a policy of the Reserve Bank of Australia. In their joint response, Application for authorisation of limited collective negotiation in relation to mobile wallet and mobile payment systems: Response to interested party submissions [PDF], dated September 30 and published by the ACCC on Monday, the banks argued that they should be permitted to negotiate collectively with Apple. "Apple would naturally prefer to deal with card issuers on an individual basis using the'take it or leave it' approach that it has used successfully in other countries.
Google and Apple are facing yet another probe of their anti-competitive practices in Australia, this time over the saturation of the market both players have in the mobile payments space. The Parliamentary Joint Committee on Corporations and Financial Services recently opened an inquiry into mobile payment and digital wallet financial services, with particular reference to the nature of commercial relationships and business models, including any imbalance in bargaining power operating between providers of mobile payment digital wallet services and financial services, merchants and vendors, and consumers. In a submission [PDF] to the committee, the Reserve Bank of Australia (RBA) raised concerns over the entry of "big tech" to the payments and greater financial services markets. It said this is presenting new competition challenges for policymakers and regulators. "These platforms have very large user bases and benefit from strong network effects, which is likely to result in them being in a strong negotiation position with payments system participants and can make it difficult for smaller firms to compete," the RBA said.
Sorry Australians with an Android phone, but you simply don't spend enough money to make it worthwhile to develop NFC solutions for you -- that would be one way to sum up the latest joint submission from CBA, NAB, Westpac, and Bendigo Bank to seek approval from the Australian Competition and Consumer Commission (ACCC) to collectively negotiate with Apple to gain access to the NFC element within iPhones. The joint submission [PDF] from the banks is a response to those that have gone before it from Apple and the general public that have called on the ACCC to stare down the banks. Commonwealth touts costly Centrelink payments overhaul as easing student struggle Over 780k email addresses reportedly exposed in Capgemini leak of Michael Page data NAB shifting towards a continuous digital delivery strategy House of Reps Committee reopens Australian'innovation and creativity' inquiry House of Reps Committee reopens Australian'innovation and creativity' inquiry Core to the bank's argument is the idea that the public will benefit if Apple is made to acquiesce and hand over access to its precious NFC hardware. "Without access to the iPhone's NFC functionality, there simply will not be the same incentives and ability to innovate for the benefit of Australian customers on either the iPhone platform or other platforms," the submission from the banks concludes. "Access to the NFC functionality on the Android platform alone cannot generate the same choice, competition, efficiencies, and innovation in integrated mobile wallets in Australia," they state.
Apple has recommended no changes be made to Australia's existing financial services regulatory framework, saying if there are to be any reforms, they should not undermine innovation or result in solutions that are less secure or less private for consumers. "Apple believes that Australia's existing regulatory framework is encouraging and fostering innovative developments that offer competition to incumbent banks, while minimising the risks that arise from developments in technology and broader structural changes to the economy driving new forms of payments," Apple said in a submission [PDF] to the Parliamentary Joint Committee on Corporations and Financial Services. "Apple believes policies or regulations that seek to prescribe or dictate a technical approach are unnecessary and create severe unintended consequences, including compromising the security of the payments systems and stifling innovation that benefits customers, banks, and the broader payments industry." The iPhone maker told the committee Apple Pay is an "example of the dynamic competition and innovation that characterises the payments markets globally and in Australia". The committee recently opened an inquiry into mobile payment and digital wallet financial services, with particular reference to the nature of commercial relationships and business models, including any imbalance in bargaining power operating between providers of mobile payment digital wallet services and financial services, merchants and vendors, and consumers.