Apple stops Aussie banks negotiating together for mobile payments

 

Apple has managed to stop banks from banding together to negotiate a better deal for Apple Pay, at least in Australia.

The banks did not want to agree to Apple’s outrageous transaction fees for its mobile banking service and instead wanted to band together to force Apple to agree to something cheaper create something that would not cost them so much.

Apple, of course said no, and complained to the regulator that the banks were ganging up on it.

Australia’s competition watchdog agreed and said that the banks could not work together to introducing their own mobile applications on iPhones and Apple Watches that could be used for contactless payments instead of the Apple Wallet.

Australian Competition and Consumer Commission Chairman (ACCC) Rod Sims said: “If others need to think it through … we’ve at least got something out there which they can kick off from.”

If the four Aussie banks won two-thirds of the nation’s credit card market, would have given them more negotiating power, and could have sparked similar appeals to regulators for access to Apple’s systems in other jurisdictions around the world.

This would have given Apple a huge headache as it has been running a divide and conquer system all over the world forcing each bank to negotiate for access to Apple gear individually.  If it had to deal with the Aussie banks as a group they could have simply told it to go forth and multiply.

But the Australian watch dog was concerned that giving the banks bargaining power could reduce competition by forcing Apple to act more like Google which owns the more open Android operating system that allows contactless payments from individual apps.

An Apple spokeswoman said it was a great decision for Australians who wanted the “easiest, most secure and private payment experience possible with Apple Pay”.

It is now thought that Apple will extract a pound of flesh from the banks that dared to oppose it by making them pay more for not doing its bidding early.  Although quite why the banks should even bother with Apple Pay is open to question.