Apple rejects banks’ proposed mobile payments “cartel”


news In a strongly worded letter to the Australian Competition & Consumer Commission (ACCC), Apple has rejected the formation of a mobile payments “cartel” proposed by four major Australian banks.

Should the ACCC grant permission for the group’s formation, it would have the right to “jointly negotiate the terms and conditions with third-party mobile wallet providers, including Apple, and institute a joint boycott during those negotiations”, the tech giant pointed out.

Further, Apple said, the banks’ application is so full of “factual and legal misstatements” that it has not been able to prepare a comprehensive submission. That will follow at “a later date”, the firm said.

In the meanwhile, Apple “strongly” urged the ACCC to reject the request for interim authorisation.

If granted, it said, the request would “harm consumers, lead to less competition and less innovation, and create a troubling precedent”.

The Cupertino-based firm went on to argue that three of the banks – Commonwealth Bank, National Australia Bank and Westpac – are three of the four biggest banks in Australia, and that “given their scale and market share”, the applicants are essential to its ability to offer Apple Pay on a “meaningful basis” within Australia.

The fourth financial institution in the applying group is Bendigo and Adelaide Bank.

Apple further confirmed that it “struggled” to negotiate agreements with the Australian banks when introducing its mobile wallet service to Australia.

“Unfortunately, and based on their limited understanding of the offering, the applicants perceive Apple Pay as a competitive threat,” Apple said. “These banks want to maintain complete control over their customers.”

“The present application is only the latest tactic employed by these competing banks to blunt Apple’s entry into the Australian market,” it added.

Apple’s claim is at odds with comments last December from Reserve Bank of Australia Governor Glenn Stevens who said in a letter to a Labor MP that he has not seen “any evidence” that Australia’s major banks are actively boycotting the Apple Pay mobile payments service.

Such a boycott would represent a “hard-core breach of the Competition and Consumer Act”, Apple said.

Accusing the banks of relying on “innuendo and misstatements” to support their application, Apple suggested the banks have “little direct insight” into Apple Pay or Apple’s terms.

To back up the claim, the firm said one of the four banks has “refused” to enter into a confidentiality agreement with Apple to discuss the terms under which it might participate in Apple Pay.

The banks’ application to the ACCC for permission to negotiate with Apple as a collective group is aimed to “force Apple and other third party providers” to accept their terms, and allow them to charge consumers choosing to use Apple Pay, Apple said.

Innovation would be another victim of the banks’ plans, according to Apple, which said:

“It would slow innovation and reduce choices by protecting members of the cartel from competition with each other for the next three years. The banks would have little incentive to compete amongst themselves to develop the best and most innovative payment services for their customers.”

The ACCC and its predecessor have never before authorised a collective boycott. While the banks have sought ACCC approval on “public interest” grounds, Apple said it “cannot identify any public benefits that could arise from the boycott”, and further that the banks’ application “lacks any proper evidence that could safely be relied on to substantiate such benefits”.

The iPhone maker went on to say that the authorisation is “inappropriate” under the ACCC’s Authorisation Guidelines if it has the potential to be “significantly anticompetitive” and the applicant has not demonstrated “compelling reasons”.

“The banks have failed to provide compelling reasons in this case that would justify the significant risks of anticompetitive outcomes,” Apple said.

Image credit: Apple


  1. Seriously, fuck apple pay.
    Let’s not give more money to a company that does everything it can to dodge paying it’s due’s in this country.

  2. mobile is a cartel. They collude to protect their insecure white elephant trash from fibre internet.

    I would never do transactions over mobile whatsoever. Now we’ve just learnt Android is vulnerable to the Linux TCP hole and older phones are now not receiving software security updates. I know mine isn’t. Phones have no firewalls of any kind.

    Banks are stuffed also. They kill business with their criminal transaction fees. We aren’t a cash economy after all. With IP gateway terminals they should be connected via VPN also not over a public network to the bank.

  3. Apple has precisely nothing to gain from operating services, payments, streaming media, etc, in the corrupt, fragmented and tiny Australian market.

    They should just sell their gadgets (marked up with a hefty Australian Consumer Law Tax to pay for our political bullshit) and stay the fuck away from “distrupting” our corrupt 1960’s era banking and media sectors.

    • What they have to gain is market share in the mobile phone industry.
      Apple Pay would be a great tool for getting extra people to buy their devices if they are the only recognised brand offering this type of payment service.

  4. I can already picture Apple being forced to pull out of dealing financial business with Australia at this rate.

    Would this give Australia a bad reputation with other companies thinking about expanding a presence here?

    Of course its all about money, but they are apparently concerned about customer security and looks like Apple do not want to risk that.

  5. Very surprised by the comments so far.

    Bigger picture guys! If they can block ApplePay, then they can do the same for Android and any other payment system that they don’t like.

    This is all about the 3 major banks stopping innovation so that they can control there profits.

    • Android pay is open enough that they can develop their own competitors on the platform.

      I already use the NAB app to use my phone as an NFC payment device. Because Android is an open platform that allows that.

      Apple require all payments to go through their own app. No one can write their own payment system that runs on the Apple hardware.

      I think both sides of this are scumbags. Apple for holding the banks to ransom and denying them the chance to write their own payment processing (effectively asking for a kickback for letting people use their platform), and the banks, for colluding with the credit card companies to maintain their monopolies (and I haven’t heard great things about the EFTPOS system really… but I am uninformed on this point).

      • Hi Peter, well I didn’t know that! I believe ApplePay is locked to Touch ID, so they don’t what to seperate it out for security concerns… and if they get to force money out of banks, well that an “unfortunate” side effect!

        How is the process on an Android phone? Do you have to unlock and open the app to make a payment?

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