Australian banks respond to submissions

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The below is a joint statement on behalf of Bendigo and Adelaide Bank, the Commonwealth Bank of Australia, National Australia Bank, and Westpac.

Australians should have the freedom to choose which mobile wallet they use for contactless payments, regardless of what mobile device they use.

This is why a group of Australian financial institutions lodged an application with the Australian Competition and Consumer Commission (ACCC) earlier this year, seeking authorisation to enter joint negotiations with providers of third-party mobile wallets.

The four banks – Bendigo and Adelaide Bank, Commonwealth Bank of Australia, National Australia Bank, and Westpac Bank – have now provided the ACCC with an extensive response to a range of incorrect and potentially misleading submissions made to the ACCC by opposed parties.

In the response, the Applicants make clear:

  • The application to enter joint negotiations is restricted to negotiations with Apple;
  • The focus of the negotiation will be over access to the NFC (Near Field Communication) function on iOS devices;
  • By locking out any independent access to the NFC function on iOS devices, Apple is seeking for itself the exclusive use of Australia’s existing NFC terminal infrastructure for the making of integrated mobile payments using iOS devices. Yet, this infrastructure was built and paid for by Australian banks and merchants for the benefit of all Australians;
  • Apple’s claim that providing the Applicant’s access to the NFC function would undermine security or customer experience is completely baseless.
    • Android, Windows and BlackBerry phones all provide access to their NFC in line with global standards of security for contactless payments set out by the card schemes. There is no evidence that Android Pay, Samsung Pay, or any of the mobile payment apps that have been developed for those platforms have affected security;
  • The concerns raised by the Applicants on competitive access are not unique to Australia, with similar issues raised in a number of jurisdictions across the world; and
  • The application also focuses on security standards and transparency in fees. Security claims and “benefits” offered to consumers with respect to Apple Pay are exaggerated.
    • Australia already has a significantly advanced, secure, convenient and world-leading contactless payments environment and the Applicants want to make sure these standards are maintained. Transparency in fees means that Australian consumers who do not want to use Apple Pay should not be burdened with costs that are imposed by Apple solely for its benefit.

“Our application remains focussed on providing Australian consumers with real choice and better outcomes for mobile payments, mobile wallets, and a range of other potentially NFC-powered functions such as public transport, airlines, store loyalty and rewards programs, and many more applications yet to be developed,” payments specialist and spokesperson on behalf of the Applicants, Lance Blockley, said.

“This is about the future of mobile payments in Australia. Will it be ‘Apple’s way or no way’, or a genuine level playing field so all consumers can have the best digital services, no matter what device they own.”

The response also reiterates that the Applicants are not taking this action because they want to delay or prevent Apple Pay from coming to Australia.

The extensive response from the Applicants is available via the ACCC website here. Accompanying the response is a range of additional expert economic commentary and reports.

To date, the Applicants’ submission has received a number of supportive submissions including from a major retailer, fintech companies and card schemes. Coles, Australian Retailers Association (ARA), Australian Payments Clearing Association (APCA), Heritage Bank, Bluechain, Australia Settlements Limited and Tyro support the collective negotiations objective to gain access to the iPhone’s NFC. Also, APCA and MasterCard support ensuring Apple Pay meets minimum security standards – and collective negotiation on pass-through of fees is supported by the ARA, ASL, eftpos and Heritage Bank.

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