Australian banks eliminate fee demands, focus legal assault on opening up Apple Pay NFC tech

Bendigo and Adelaide Bank, Commonwealth Bank of Australia, National Australia Bank, and Westpac have dropped fee negotiations, saying that access to core Apple Pay NFC technology would benefit retailers, boost loyalty programs, and enhance touchless payments as a whole. The banks believe that there is "no genuine competition" in Australia, leaving Apple with a "stranglehold" on the marketplace, should it be allowed to bring a closed system to the country's banks.

"Open access to the NFC function, as occurs on the world's most popular and widely installed mobile operating system Android, is important not just to the applicants and mobile payments, but to a range of NFC-powered functions across many sectors and uses," said the bank's collective spokesman Lance Blockley in a statement. "This has global implications for the use of NFC on smart phones.

"The applicants expect that Apple Pay would be offered to their customers alongside open access to the NFC function," added Blockley. "Any delay or frustration will be as a result of Apple refusing to negotiate."

The four banks last year filed a complaint with the Australian Competition and Consumer Commission (ACCC), asking to collectively negotiate for access to the same NFC technology Apple Pay uses. Although a final ruling isn't likely until March at the earliest, a draft decision appears to have already shot down the idea.

Only one major national bank, ANZ, currently supports Apple Pay in Australia. Alternatives from international firms ING and Macquarie are also available in the country.

Apple has insisted that allowing third-party access to its NFC technology would compromise security, and that device owners would have to manually pick which app uses the chip anyway, potentially reducing adoption. On Friday, Apple Vice President Jennifer Bailey decried the legal maneuvering.

"While initially, in many markets, there have been banks that have initially been wary about working with a company as large as Apple, once they begin to work with us and understand the Apple Pay platform, they see the benefits of it," Bailey said. "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."

Bailey noted that Australians are using Apple Pay more often each month than customers in any other country, credited to "Australia being a recognized global leader in contactless payments and usage." Over 26 percent of ANZ customers are using the platform.