In August Patently Apple posted a report titled "Apple Tells Australian Commission that Three Top Banks are in a Cartel to Dictate Terms for Apple Pay." We then followed up with a report in "early September titled "Korea's Financial Tech Firms Unite to File a Complaint with the Fair Trade Commission over Apple Pay." The saga continues today with Fintech Australia who has interposed itself in the war between Apple and the nation's banks, arguing that the dispute highlights the need for open access in all areas of financial infrastructure."
The Australian reports today that "A group of banks, including three of the big four, have been casting around for allies as they seek clearance from the competition regulator to collectively negotiate with Apple over the price of access to its iPhone platform for mobile wallet services.
Coles and other retailers have backed the banks, as has payments innovator Tyro. Tyro says in its submission to the ACCC that it's in the public interest to maintain choice for consumers, merchants and banks in relation to digital wallets and applications."
According The Australian "Fintech Australia is taking a different approach, and it's the right one.
It wants to use the Apple versus everyone battle as a prod to achieve wider, underlying reform, arguing that a negotiation over pricing will not resolve the fundamental issue of access to the iPhone infrastructure known as Near Field Communications.
The irony is not lost on the lobby group either, that the same banks arguing so strongly for NFC access on Apple devices continue to block third-party access by fintech companies to bank financial data."
The report further noted that "The Fintech Australia submission to the ACCC states that "Consumers should have the right to access their money, and instruct institutions to transfer that money, using the device or mechanism of their choice, to the third party of their choice. Equally, consumers should also have the right to access their data, and instruct institutions to share their data, with the third party of their choice."
Last month, the regulator declined to grant interim authorization to the banks. The ACCC expects to release a draft decision on the Apple issue next month.
Apple developed an independent operating system for their mobile devices called iOS. The designed security system tightly ties software and hardware together to better secure consumer information, especially for Apple Pay. Many of the top banks in the world are working with Apple. Australian banks want to fight Apple and this has extended to South Korea.
The Australian business correspondent just takes the view that it's a "no brainer" that Apple Pay should be an open system. It's an age old argument that every competitor of Apple's has complained bitterly about for ever and a day. Any time Apple has a market advantage in anything, these views pop-up instead of negotiating or competing directly with Apple.
What's next? The Australian Music industry demanding that Apple's iTunes or Apple Music be open for all Australians to freely enjoy? In the end, if this group of stubborn banks can't compete in the marketplace with Apple Pay and begins to lose business to the only Australian bank working with Apple, then that's the free market and they'll be forced to work harder or smarter to earn the Australian consumer's business instead of being protected like an elitist group.
It'll be interesting to see what the official decision will be from the Australian Competition & Consumer Commission (ACCC). I believe their initial decision against the banks was correct and hope that they make that decision final.
To Date, ANZ is the only big Australian bank to have intelligently struck a deal with Apple.