Banking cartel holds firm on Apple appeal being exclusively about NFC access


Banking cartel holds firm on Apple appeal being exclusively about NFC access

The banks have scrapped all of their previous complaints about transaction fees but still want full access to the NFC (near field communications) antenna in the iPhone which interacts with contactless payment systems.

According to Blockley, who spoke on behalf of the banks, the NFC-targeted application is not an attempt to delay Apple Pay's wider support in Australia as it would be offered alongside other mobile wallets - similar to how Android supports open access to the NFC function.

"Without open NFC access on iPhone, no genuine competition in the provision of mobile wallets is possible and Apple will have a stranglehold on this strategically important future market", the banks said in their statement.

Apple has said that even if the ACCC grants the banks' application it will not offer open slather access to the iPhone's NFC capabilities.

In their petition given mid of previous year, they wanted the access to NFC (Near field communication) controller apart from discussing costs.

"That hasn't fully happened with the ACCC applicants, because the conversation is happening through the ACCC process, compared to what normally happens, which is we have the conversation bilaterally".

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"The point of the proposed conduct is to enable real choice and real competition for consumers and to facilitate innovation and investment in the digital wallet functionality available to Australians", the submission says.

"The applicants flatly reject Apple's unsupported assertions that the application is about an objection to the fees that Apple wishes to impose, rather than NFC access". ACCC chairman Rod Sims said it was "currently a finely balanced decision".

By dropping their bid to negotiate together on fees and focusing exclusively on technological access, the banks are seeking to put the regulator's focus onto Apple's restrictions and tip the decision their way. The agency, however, believes that if the banks are given the opportunity to negotiate collectively with Apple they will be in a better position to bargain, but ACCC is yet to take a decision over the issue.

Commonwealth Bank of Australia (CBA.AX), Westpac Banking Corp (WBC.AX), National Australia Bank Ltd (NAB.AX) and Bendigo & Adelaide Bank Ltd (BEN.AX) command two-thirds of Australia's credit card market but have yet to allow use of their cards with Apple Pay which was introduced to the country previous year. The banks and retailers argue this restricts consumer choice, and prevents them from offering compelling "digital wallets". "Any delay or frustration will be as a result of Apple refusing to negotiate", Blockley said.

Apple Pay allows users to register credit cards on iPhones, and pay for goods and services by swiping the devices over contactless payment terminals. NFC is commonly used as a means of contactless payment for smartphones. "Nor are the applicants manufacturers of mobile phones - both parties need each other to bring strong mobile payment offerings to the market". Particularly in a relatively small market like Australia, the banks said that larger addressable market provided by NFC access on the iPhone platform increases the incentives to invest, and would reduce the cost and risk of failure and enhance the likely chances of success.



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