The competition regulator has rejected an application by the banks to collectively negotiate with technology giant Apple over access to the iPhone’s “near field communication” controller.
Commonwealth Bank of Australia, Westpac Banking Corporation, National Australia Bank and Bendigo and Adelaide Bank had asked the Australian Competition and Consumer Commission for permission to form a block in order to give them more negotiating power in discussions that would have asked Apple open the NFC to their own digital wallets. Apple has not made such a move for any bank in the world.
But ACCC chairman Rod Sims said on Friday: “We are concerned that the proposed conduct is likely to reduce or distort competition in a number of markets.”
The ACCC said if the banks were to get access to the NFC, it could reduce competition between Apple and Google’s Android phones, could reduce competition for payments devices other than smartphones, and could reduce the competitive tension between the banks in the supply of payment cards.
The ruling is particularly significant because, despite the popularity of phones running on Google’s Android operating system, Apple is by far the largest single supplier of phones in Australia.
The banks want their own digital wallets to access the NFC to enable contactless payments to be made through them. Apple only allows its digital wallet to access the NFC. But the banks have refused to do a commercial deal with Apple, effectively locking three-quarters of Australia’s card holders out of Apple Pay. The decision s each of the applicant banks will have to negotiate bilaterally with Apple if they want to provide Apple Pay to their millions of customers.