Apple Hits Out at Australian Banks Over Apple Pay Boycott Motive

  • Banks are seeking to delay or block Apple Pay, tech giant says
  • Competition regulator to hand down final ruling in March

Apple Inc. has stepped up its battle with Australia’s banking industry over the future of mobile payments, accusing an industry consortium of attempting to “delay or even block” the expansion of Apple Pay into the country.

In its latest submission to the Australian Competition & Consumer Commission, published Monday, Apple said it was concerned banks are seeking to “delay the expansion of Apple Pay,” hurting both consumers and smaller card issuers who could use the technology “as a means of securing a digital presence in competition with the big banks.”

It is the latest salvo from the U.S technology giant in a dispute about whether the country’s leading banks should be permitted to negotiate as a bloc over the introduction of Apple Pay. The banks, which have invested in their own mobile technology in recent years, fear being shut out of the fast-growing market and want to negotiate as a group to boost their bargaining power.

Australians are the world’s biggest users of contactless payment technology, according to data from Visa Inc., making it a test-ground in the global competition between banks and tech companies as to who will dominate future payments technology.

In a draft ruling in December, the ACCC refused to grant the banks -- Commonwealth Bank of Australia, National Australia Bank Ltd., Westpac Banking Corp. and Bendigo & Adelaide Bank Ltd. -- permission to negotiate collectively. The final ruling is expected in March. Australia & New Zealand Banking Group Ltd. isn’t a party to the action, having decided in April to accept Apple Pay.


The dispute centers around access to the iPhone’s near-field communications antenna, the technology that makes payments on contactless readers possible. Apple wants banks to allow customers to upload their credit cards to its proprietary digital wallet, whereas the banks want their apps to be given direct access to the technology. Apple says giving the banks access would “undermine the security and simplicity” of its system.

In its latest submission, Apple said the banks’ core motivation is to avoid paying fees to use Apple Pay, or to discourage their customers from using the technology by charging for the service. The banks are ultimately asking to be “allowed to continue to free-ride on the significant investments’’ Apple has made, the filing said.

Banks Respond

That interpretation was “incorrect and unsupported,” the banks said in a statement.

“The application has never been about preventing Apple Pay from coming to Australia or reducing competition between wallets,” the banks said. “It has always been about providing real choice and real competition for consumers and facilitating innovation and investment in the digital wallet functionality available to Australians.”

The banks’ formal response to the ACCC’s interim ruling will be lodged later this week.

While Apple is the current leader in mobile in-store payments, it has been facing increasing competition. In the U.S., retailers from Wal-Mart Stores Inc. to CVS Health Corp. are rolling out their own services.

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