Apple launched its Apple Pay service almost a year ago in November. Since then, 3,000 banks have happily signed up for Apple Pay. Come July this year, however, four banks from Australia have formed cartel against Apple and its banking service. The big four—The Commonwealth Bank of Australia, National Australia Bank, Westpac, and Bendigo and Adelaide Bank—have joined forces to collectively negotiate with the third-party mobile wallet providers, such as Apple, on conditions relation to competition, best practice standards, and efficiency and transparency.


The banks requested for the Australian Competition and Consumer Commission (ACCC) to grant initial interim authorization within 28 days to allow them to commence negotiations on limited issues while the consumer warden considers the application for authorization. The banks want their own apps to be able to use iPhone’s wireless payment parts and to get a commission from the cut Apple takes on each Apple Pay transaction.

Apple’s Answer

Apple Pay keeps payments secure using a system of tokenisation. Instead of sharing your credit card information during a transaction, the app instead creates a unique token as a stand-in, which it shares with the point of sale.


Today, the ACCC has posted Apple’s submission in reply, a letter in which the high-end company argues that giving access to iPhone’s NFC would harm consumers by jeopardizing security. Apple has strongly urged the commission to reject the interim authorization, saying that if granted, the request “would harm consumers, lead to less competition and less innovation, and create a troubling precedent.”

The letter, signed by the local head of Apple Pay, Marj Demmer, stated that, “Apple upholds very high standards of security” by building “hardware, software and services in a deeply integrated manner so we can provide the highest possible security. Providing simple access to the NFC antenna by banking applications would fundamentally diminish the high level of security Apple aims to have on our devices.”

Apple further argues that the four banks want to get their hands on the iPhone’s NFC to preserve their credit card businesses. Australian credit card interest rates often near 20%, despite home lending rates currently being below 5%. The technology giant also claimed that these banks wanted to “maintain complete control over their customers” and “force” Apple and other third-party providers to accept their terms, which it believe would allow the banks to charge consumers that choose to use Apple Pay.

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