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Australian banks denied approval to ‘boycott’ Apple Pay

Published 31 March 2017

The Australian Competition and Consumer Commission (ACCC) has denied approval for a group of local banks to include their own payment apps on Apple’s smartphones.

The banks have sought permission from the competition watchdog to bargain with Apple to gain access to the near-field communication (NFC) controller in iPhones.

Last year, the Commonwealth Bank of Australia, Westpac Banking Corporation, National Australia Bank, and Bendigo and Adelaide Bank filed a joint application with anti-trust regulator for the access.

ACCC Chairman Rod Sims said: “The ACCC is not satisfied, on balance, that the likely benefits from the proposed conduct outweigh the likely detriments. We are concerned that the proposed conduct is likely to reduce or distort competition in a number of markets.”

An approval from the ACCC would have allowed the banks to offer their own integrated digital wallets to iPhone customers.

The banks argued that NFC controller access would enable them to provide competing wallets on the iOS platform.

According to the banks, availability of their wallets would lead to several benefits, including increased competition and consumer choice in digital wallets and mobile payments in Australia.

ACCC said that it accepts that NFC access would result in increased competition but it will also likely lead to distortions to competition.

Sims said: “Access to the NFC in iPhones for the banks could artificially direct the development of emerging markets to the use of the NFC controller in smartphones. This is likely to hamper the innovations that are currently occurring around different devices and technologies for mobile payments.”

In November 2015, Apple Pay was launched in Australia with a through a limited partnership with American Express.

But many local banks opposed it as they were not able to access Apple's near field communication (NFC) technology, Reuters reported.


Image: Apple Pay is an example of a contactless payment, which uses NFC technology. Photo courtesy of Mybloodtypeiscoffee/Wikimedia Commons.