Four Pillars: Squaring up to Big Tech for Commonwealth Bank chief executive Matt Comyn

CBA chief Matt Comyn will front the House of Representatives economics committee again on Thursday and payments will be high on the agenda. Picture: Bloomberg

Commonwealth Bank chief executive Matt Comyn can rest assured his concerns about “Big Tech’s” creeping dominance of the payments system have pierced the Canberra bubble.

The CBA boss can expect a barrage of questions about the issue from both major parties when he appears before the House economics committee, chaired by Liberal MP Tim Wilson, on Thursday.

Competition tsar Rod Sims has already confirmed that a formal ACCC investigation is underway, although details until now have been scant.

The investigation was kicked several months ago, before Comyn fired off a broadside at the world’s biggest company, Apple.

Appearing before the parliamentary joint committee on corporations and financial services in July, the CBA chief said additional laws might be needed to “reintroduce competitive tension” in the digital wallet market.

It was an issue identified in April by the ACCC’s digital platform services inquiry, which found that Apple’s App Store and Google’s Play Store had significant power in the distribution of mobile apps in Australia, and measures were needed to address this.

The core problem was that Apple and Google didn’t just run the marketplaces; they also competed in the marketplace with their own apps, and controlled the terms on which rivals gained access to their stores.

A key example highlighted by Comyn in July was that iPhone users who wanted to make a credit card payment in a store had to use the Apple Pay digital app.

The ability of rivals to compete was limited because Apple restricted access to the NFC chip used to communicate with payment terminals for “tap and go” payments.

Comyn told the committee that Apple had an 80 per cent market share in digital wallet payments – a level which was “usually cause for concern”.

Apple hit back, using a different market definition to argue that its share of Australian credit and debit card spending was less than 10 per cent.

Whatever the case, the Morrison government has flagged legislation to give the Treasurer new powers to regulate payment services like digital wallets, to avoid ceding control of the payments system to the big tech platforms.

In a formal ACCC probe, the watchdog will typically take market soundings and can also use its compulsory powers to gather information.

It’s expected the current investigation will wrap up next year.

Both Wilson, as well as committee deputy chair and Labor Party MP Andrew Leigh, confirmed that payments competition would be raised with Comyn.

Wilson said the Treasurer’s proposed power to intervene in the market had been “universally welcomed” by the banks and the Reserve Bank.

He said Comyn and ANZ Bank chief executive Shayne Elliott would both be asked for their views on the new regulatory model, and whether there should be any limits on the Treasurer’s power to intervene.

–

ANZ succession

Apparently, nothing much should be read into ANZ New Zealand chief executive Antonia Watson sharing a trans-Tasman Business Circle platform on Tuesday with her boss Shayne Elliott.

While Watson, 51, is among a select few internal candidates to be the group’s next CEO, a similar event was hosted last October for Commonwealth Bank CEO Matt Comyn and Vittoria Shortt, head of the bank’s NZ unit, ASB.

Elliott, 57, is well into his sixth year in the job, and is closer to the end of his tenure than the beginning, though a leadership change is not imminent.

However, the board will be aware that Elliott’s sixth anniversary as chief executive in January will mark him as one of the major banks’ longer-serving bosses.

The leading internal candidate is Mark Whelan, 61, who became institutional boss in 2016 and set about lifting returns by slashing the number of customers from an unwieldy 27,000 in 2015 to 7000.

Whelan lowered the level of risk and reduced the division’s capital intensity, addressing the market’s twin concerns after previous CEO Mike Smith rolled out his Asian super-regional strategy.

It’s not a unique situation for an incoming CEO to be older than the incumbent – National Australia Bank chief Ross McEwan, for example, had been around the block a few more times than Andrew Thorburn – but neither is it a common occurrence.

Watson, 51, is the more conventional candidate in that sense.

She would also be the first female CEO of the Melbourne-based lender, and only the second for the major banks after Gail Kelly’s tour of duty at Westpac.

As ANZ New Zealand boss – promoted after five years as head of retail and business banking and, before that, chief financial officer – Watson’s profile in Australia is not significant.

Against that, ANZ New Zealand is the country’s biggest bank and a full-service lender with its own board.

It’s fully regulated in NZ and is responsible for its own funding.

NAB used its BNZ operation as an incubator for two of its CEOs – Thorburn and Cameron Clyne.

Internally, Watson has won plaudits for stabilising the NZ business and changing its culture after the 2019 departure of predecessor David Hisco, amid concerns he “mischaracterised” personal expenses including the use of corporate chauffeured cars and wine storage.

In its May interim result, when ANZ lifted cash profit from the preceding half by 28 per cent to almost $3bn, Elliott highlighted the performance of Watson’s business. NZ, he said, had continued its recent strong performance with record lending growth combined with disciplined cost management.

“This is a well-run business that is an important part of our overall portfolio and is well-placed to manage increased regulatory capital demands,” Elliott said.

[e-mail] Twitter: @Gluyas