Google wants exemption from banks’ mobile payments ‘cartel’


news In a letter to the Australian Competition and Consumer Commission (ACCC), Google has requested exemption from an effort by four major Australian banks to be able to collectively negotiate terms with, as well as boycott, third-party wallet app providers.

The banks – Bendigo and Adelaide, CommBank, National Australia Bank and Westpac – were described as attempting to form a “cartel” in Apple’s recent forthright rejection of the ACCC application.

Google Asia Pacific (GAP) recently began offering Android Pay in Australia in partnership with a number of other Australian banks.

In the letter, the tech giant said there was “no allegation or evidence” provided in the banks’ applications that it has engaged in “any conduct detrimental to the applicants or that an ability to negotiate collectively and engage in a collective boycott is required for negotiations relating to the Android Pay service”.

Providing an example, GAP said there is no claim that GAP has restricted access to Android’s NFC (near-field communications) interface.

“To the contrary, the applicants and other parties can offer payment or wallet apps on the Android platform because the Android API for NFC is open to all, GAP said – a fact that it said was recognised in the banks’ submission.

Additionally, the banks’ have also acknowledged that there are “numerous” mobile wallet services available on Android, “including from some of the applicants themselves”.

Google’s position as the developer of the Android operating system, it continued, gives it “no particular advantage” as a provider of mobile wallets since Android’s open API for NFC creates a “level playing field” and because Google does not “condition access” to Android when Android Pay is installed or used.

Continuing to make its case, GAP said there is also no allegation in the banks’ application that Google prohibits issuers from passing on any added costs of using Android Pay to their cardholders.

Instead, the banks’ acknowledged that “Google does not charge issuers for participation in Android Pay.”

Finally, GAP said, the banks submitted no allegation or evidence that Android Pay “inadequately protects against fraudulent activity”.

In the case of Android Pay, fraud prevention measures are “consistent” with Australian Payments Clearing Association (APCA) guidelines referenced by the banks in their application, Google said.

Saying there is “no evidence” that it must implement extra fraud prevention measures or be forced to adopt additional industry standards or guidelines, GAP said:

“In short, the concerns expressed in the Applications do not extend to the Android Pay service.”

The company ended by asking the ACCC to confirm with the banks that their applications do not extend to negotiations with GAP for the Android Pay service.

“If that confirmation is not given, GAP respectfully requests that any grant of authorisation not extend to any negotiations related to Android Pay,” the firm said.

Image credit: Robert Scoble, Creative Commons