Coles, other retailers back banks in Apple dispute

Banks have won support in their battle with Apple after Coles and other retailers backed the lenders.

Tap and go payments by iPhone have the banks up in arms.

Some of the nation’s biggest banks have won support in their battle with Apple after supermarket giant Coles and other retailers backed the lenders’ push to negotiate collectively with the technology giant over “tap and go” payments on iPhones.

After the competition regulator last week extended its consideration of the banks’ request, Coles said: “We do not object to the application for collective negotiation on industry standards and guidelines in the design of security and other processes.

“It is important to recognise that the industry has collectively made very significant investment in payments technologies like near field communication, with an open and inclusive approach aimed at continually improving the experience for all customers,” Coles said in a submission.

Last month, Commonwealth Bank, National Australia Bank, Westpac and Bendigo and Adelaide Bank sought permission from the Australian Competi­tion & Consumer Commission to negotiate collectively with third-party mobile wallet providers and undertake a “collective boycott” during discussions.

The ACCC last week decided not to grant interim authorisation, arguing more time was needed to assess the issues and a draft decision would be released in October, further delaying the widespread rollout of Apple Pay and contactless payments on iPhones.

One of the main issues is the banks’ inability to use NFC hardware on Apple devices to enable contactless payments through the banks’ own digital wallets or banking apps. Coles, which issues credit cards, said being able to tailor better solutions “should be the driver for customer choice and not a technical lockout that many consumers may not have realised would be imposed when they purchased their mobile device”.

Others to support the banks’ push include independent payments group Tyro, the Australian Retailers Association and the Australian Payments Clearing Association. PayPal Australia’s submission did not support or object to the banks’ request.

But Apple, which recently launched Apple Pay functionality in Australia after reaching agreement with ANZ Bank and American Express, had urged the ACCC not to give the banks interim authorisation, arguing it would “harm consumers, lead to less competition and less innovation, and create a troubling precedent”.

Apple claimed the banks were trying to do a deal on their terms, charge consumers to use Apple Pay and “force Apple to undermine the security of its mobile payment service by opening access to the NFC antenna”.

The standoff has pitted the major banks against the world’s biggest company, with CBA chief Ian Narev this month telling The Australian that Apple was trying to keep customers on its products, and that the big banks were not the only stakeholders affected.