Apple wins Australian court ruling against banks to retain Apple Pay control

National Australia Bank, Westpac, Commonwealth Bank of Australia and Bendigo and Adelaide Bank had been trying to negotiate with Apple to allow iPhone users to make payments from their own integrated digital wallets

According to Apple, 3,500 banks in 15 markets now use Apple Pay (PA)

Apple has won a major legal battle that had pitted it against some of Australia’s largest banks and will likely mean the tech giant can retain full control of the use of its payment technology in the country.

The Australian Competition Consumer Commission (ACCC) announced on Friday that it had rejected a request by four of the country’s largest banks to negotiate with Apple over mobile payments.

The National Australia Bank, Westpac, Commonwealth Bank of Australia and Bendigo and Adelaide Bank had been trying to negotiate with Apple to allow iPhone users to make payments from their own integrated digital wallets instead of through Apple Pay, without paying Apple fees.

The Near-Field Communication (NFC) technology enables users to make contactless payments through their phones from a bank card digitally registered with Apple Pay. Each transaction then enables Apple Pay to charge a fee to the respective bank.

The banks sought to bargain over connecting the payments technology with their individual apps used in iPhones. This, they said, would have been of significant public benefit because it would have increased competition and consumer choice in digital wallets and mobile payments.

However, ACCC competition regulator chairman Rod Sims said Apple Pay would increase competition between the banks, making it easier for consumers to switch between card providers by “limiting any ‘lock-in’ effect individual bank wallets may cause”.

Mr Sims also listed the rapid change in the development of this emerging market as a reason for the ruling because it is “uncertain how competition may develop”.

The ACCC also stated that individual bank wallets would make Apple operate more like Google, whose Android system enables payment from a variety of different banking apps. Mr Sims told Reuters that if they had ruled against Apple, it could “force one competitor to adopt a strategy of the other”.

Customers of the four banks had up until now been prevented from using Apple Pay, launched last year in Australia, because the banks had not yet reached an agreement on the conditions with Apple.

Another Australian bank, ANZ, which uses Apple Pay, said that it had already seen customer numbers increase as a result of the payment technology.

Following the latest decision, the banks will be able to negotiate with Apple on an individual basis but the ruling means they have lost their power to bargain collectively.

In a collective statement cited by Reuters, the banks said they were disappointed “given our considerable effort to demonstrate the public benefits inherent in open NFC access”.

Apple was not immediately available for comment when contacted by The Independent.

In a statement cited by the Financial Times, Apple said they “look forward to continuing to work with individual banks in Australia and around the world to bring Apple Pay to their customers”.

The company told the paper that 3,500 banks in 15 markets now use Apple Pay.