Commonwealth Bank and Westpac bosses demand level playing field against tech giants
Commonwealth Bank and Westpac bosses have demanded regulatory reform as global tech companies gain unfair advantages over Australian banks.
Two of the bosses of Australia’s big four have taken aim at the “uneven playing field” between banks and global tech giants like Apple, asking parliament and regulators to curb their powers to protect the national interest.
Commonwealth Bank chief executive Matt Comyn said rules and laws were not keeping pace with technological advancements, giving tech giants an advantage over Australian businesses, in a freewheeling opening address to the House of Representatives economic committee.
“There is no moat, no ocean that’s large enough that’s going to protect Australian industries from the technology shifts and the technology players,” he told MPs on Tuesday.
Mr Comyn said banks were being hamstrung by the capital they have to set aside for loans and their “social licence obligations”, whereas tech giants were unencumbered by such commitments.
Describing payments as a “sovereign capability”, Mr Comyn said CBA broadly supported the Reserve Bank of Australia’s current proposals to ditch debit and credit card surcharging estimated to save consumers $1.2bn annually.
But he said the RBA’s proposed reductions to interchange fees, which are charged between banks for processing card payments, could hamper Australian businesses, while benefiting international players which are not currently governed by the RBA’s proposal.
His comments were echoed by Westpac CEO Anthony Miller who said any proposal to lower interchange fees needs to also extend to international payment providers to ensure a “level playing field for all participants”.
“The proposal only targets Australian payment service operators and provides a free pass to global giants participating in our system. This approach would simply send more payments revenue and tax out of Australia,” Mr Miller said.
He called for the RBA to widen the remit of its review of card payment costs and surcharging to include digital wallets and international participants. Last month, the RBA quietly extended the time for concluding its review until March 2026.
As an example of how the banks were handicapped against their tech rivals, Mr Comyn said the Australian Competition and Consumer Commission made the “wrong decision” a decade ago not to allow the major banks to collectively bargain with Apple when the tech giant launched Apple Pay in Australia.
Apple charges banks fees for processing transactions made through Apple Pay, with banks now facing an “extremely difficult” situation, Mr Comyn said.
But he added that the threat to Australia’s sovereignty was not just limited to payments.
“Take Netflix as an example, I’m a subscriber. I can’t remember what their total revenue is. It’s more than $10bn (but) I don’t think they pay $1 of tax,” Mr Comyn said.
He called for a level playing field, arguing that big players should make a “proportionate and fair contribution”.
“One of the ways that should be done is through taxation. I understand the sensitivities that may cause in other areas,” Mr Comyn said.
“But I do think this is an issue that’s only going to get worse, at least in my view. If not now, then when?”
The boss of Australia’s largest bank also dug his heels in over demands to refund $270m in high fees charged to 2.2 million Centrelink recipients who the corporate regulator said were eligible for low or no fee accounts.
Mr Comyn said there were “no instances of unlawful conduct”, insisting the customers had been charged “in accordance with the terms and conditions”.
“It’s not merely a question of just handing the money over. It’s, of course, not my or our money. It’s the money of our owners,” Mr Comyn told MPs.
But Choice’s head of policy and government relations Morgan Campbell said the CEO had “got it backwards” and should refund the low-income customers.
“Before this money was in the pockets of CommBank shareholders, it was in the bank accounts of Australians on low incomes, and it should never have been taken out,” Mr Campbell said.
Mr Comyn also said that banks have done a “poor job” of countering the decades-old narrative that they earn “super profits” when they are often generating returns below the cost of capital.
Drawing a distinction between profits and profitability, Mr Comyn said that the cost of doing business for banks was the “definition of value destructive” and that many challengers had failed because “the profitability isn’t there”.
He added that increasing competition within Australia’s banking sector was ultimately “good for consumers”.
Mr Comyn predicted there would be no rate cut next year, while Mr Miller said he was forecasting two: one in May and one in August.
CBA shares closed at $153.22 on Tuesday, almost 20 per cent below their July peak. Westpac shares were also down almost 1.85 per cent to $37.87.
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Originally published as Commonwealth Bank and Westpac bosses demand level playing field against tech giants
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