Banks’ digital wallet move delayed

The ACCC wants more time to consider a bid by banks to bargain with Apple and get digital wallets onto iPhones.

Using Apple Pay.

The Australian Competition and Consumer Commission has held off from giving permission to a consortium of Australian banks hoping to collectively bargain with Apple and get their digital wallets onto iPhones.

The competition watchdog has decided against granting the consortium — which includes Commonwealth Bank, Westpac and National Australia Bank — an interim authorisation, citing that it needs more time to consider the matter.

“Given the complexity of the issues and the limited time available, the ACCC has decided not to grant interim authorisation at this time,” the regulator’s chairman Rod Sims said.

“The ACCC requires more time to consult and consider the views of industry, consumers, and other interested parties.”

The regulator will now release a draft decision in October after conducting wider consultation with the industry and consumers.

Apple had pushed the regulator to delay any judgement on the matter to accommodate the 6-month statutory period of assessment, as it gets ready to take on the banks.

ANZ is the only one of the big four banks that has struck a deal with the iPhone maker, sacrificing a chunk of the interchange fees in a bid to win first mover advantage.

Meanwhile, the likes of CBA, NAB and Westpac, along with Bendigo and Adelaide Bank, have decided on a more antagonistic approach, appealing to the ACCC to let them bargain with Apple to gain access to the Near Field Communications (NFC) antenna- which allows contactless payment - on iPhones and get their digital wallets loaded onto the smartphones.

While financial institutions have been able to provide contactless options on Android phones, Apple’s iOS has been a closed ecosystem.

Apple has so far categorically refused to accommodate the banks, lashing out against the ‘cartel’ and its push to dictate terms to the US technology giant.

However, the banks have received support from some unexpected quarters with some of the challengers to the traditional banking industry siding with the consortium.

Payment platform provider Tyro, a regular critic of the big four, said in its submission that Apple must open access to its NFC technology.

“It’s in the Australian public interest to maintain choice for consumers, merchants and banks as to mobile wallet solutions and the applications that they enable,” Tyro said in its submission to the ACCC.

“Eliminating third party access to the Apple NFC function is particularly effective in stifling innovation and competition, because it is the only available and highly secure connectivity option that is ubiquitously available across the entire card payment infrastructure and terminal fleet.”