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Why Australia’s biggest banks are fighting with Apple and Google



The war over contactless payments has gone to the regulator.

Yesterday, four banks -- Commonwealth Bank, National Australia Bank, Westpac and the Bendigo and Adelaide Bank -- applied to the Australian Competition and Consumer Commission (ACCC) for permission to collectively negotiate with Apple, Samsung and Google over access to their smartphone payment apps (Apple Pay, Samsung Pay and Android Pay, all of which are now available in Australia).

Collective negotiation is generally illegal under Australian competition law, since it's thought such collusion can lead to higher prices for consumers. The banks are seeking an exemption because they want to be able to negotiate a deal to have their cards included on those platforms. One of the main reasons Apple Pay took so long to launch in Australia was arguments over what percentage of each transaction Apple would take.

More tellingly, the banks also want to be able to use the NFC chips on phones to enable contactless payments through their own apps. That's already possible on Android phones, but not on iPhones. Apple won't approve any apps that try and use the iPhone's NFC in that way, because it wants to entirely control that market (and take a cut from any transactions that use it). If you want to make a contactless payment with your iPhone, Apple Pay is the only choice (short of clunky solutions that involve adding a separate NFC sticker or case).

Conspicuously absent from that list of banks? ANZ, which is the only one of the "Big Four" which has struck a deal with Apple and is offering Apple Pay. ANZ has said that its applications for credit cards have soared since offering Apple Pay, which presumably means that it's worth having to put up with Apple taking a cut. It would seem the other banks aren't convinced that this effect would apply across the board.

I can see both sides of the argument. The relevant payment apps come pre-baked into your phone, so that will be convenient for some customers. That said, you'll still want to have an app to allow full access to your banking, and the current trend is for those apps to offer as many features as possible. And your bank already has your financial history; why add a tech company into the mix?

A decision on the application is expected within a month. Whatever the ACCC decides, the outcome is going to be interesting. Apple rarely likes to give in, but the ACCC has emerged victorious in most of its own stoushes with the tech company.

Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on

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