Eight months after lodging their submission to the Australian Competition & Consumer Commission (ACCC), Australia’s big banks have been denied the right to work together in negotiations with Apple over access to Apple Pay for their customers.

The Commonwealth, National, Westpac and Bendigo Banks submitted to the ACCC that they should be allowed to collectively bargain with Apple to access Apple Pay, to get terms beneficial to them.

A draft decision late last year didn’t bode well for the banks, who then revised their application to be more about accessing the Near Field Communications (NFC) chip on the iPhone for their own Apps to be able to use.

That all came crashing down this morning when the ACCC issued it’s final determination denying the banks request:

“This is a complex matter involving emerging and dynamic markets and the ACCC is not satisfied, on balance, that the proposed conduct is likely to result in public benefits that would outweigh likely public detriments including from any lessening of competition or that the proposed conduct is likely to result in such a benefit to the public that it should be allowed to take place.”

Acting as an independent body, in the interests of consumers, the ACCC is all about the public benefit, and it should be noted that on balance, they did see some public benefit in the banks getting that NFC access:

“NFC access is likely to result in a significant public benefit from increased competition in mobile payment services on iPhones. This increased competition, particularly in the short term, is likely to provide a competitive constraint on Apple in its pricing for Apple Pay and increase competition, innovation and investment in mobile payments made via the embedded NFC controller on Apple devices”

However that was the only area of significant public benefit, and in the full determination there are many areas of public detriment.

In fact, the ACCC closely noted the strength of the banks in terms of market share, and acknowledged that their collective bargaining would in fact be a disadvantage to Apple

“While iPhones accounted for only around 36 per cent of Australian smartphones in recent years, the ACCC accepts that Apple has significant bargaining power in negotiations with the individual Applicant banks over terms and conditions to allow their payment cards to be provisioned into Apple Wallet. This is a result of Apple’s vertical integration from device hardware to operating system software through to mobile application software, the global nature of its business and its global stance on not allowing direct access to the NFC controller on iPhones.

Authorisation would allow the Applicants to join together and increase their bargaining power in negotiations on NFC access and App Store access. Together, the three major Applicants account for around 65 per cent of credit card use in Australia and by collectively bargaining and boycotting Apple, the Applicants would be in a stronger bargaining position with Apple relative to individual negotiations by each party.”

Approval for this action would have blacked out a window of 18 months where the banks could agree to not participate in Apple Pay, and the ACCC saw that as a detriment to consumers

the ACCC considers that the proposed conduct is likely to result in a small public detriment from delaying the availability of Apple Pay to consumers for the period of the authorisation.

The authorisation sought would allow the Group Participants to collectively agree not to sign up to Apple Pay for the next 18 months while they are negotiating with Apple. Given the differentiating characteristics of Apple Pay and other mobile payment services, a delay in being able to access Apple Pay functionality during the proposed conduct is likely to result in a small public detriment in the form of decreased consumer choice for the duration of the proposed conduct.

So, it’s back to the drawing board for the banks.  As stated earlier in our coverage of this, a large amount of public support weighed into the ACCC decision, and I personally made a submission to the ACCC on the matter.

Consumers deserve choice, and Apple Pay is one choice in the market which 65% of Aussies are not getting – whether that changes or not is another thing.  This decision does not force the banks to adopt Apple Pay for their consumers, but it does mean that if any of the banks were getting cold feet, they can now approach Apple one on one and negotiate participation – just like thousands of banks around the world, including 40+ banks in Australia have done.


The banks of course are not happy, they have issued a statement today:

“This case has always been about consumer choice.  The applicants made this application to seek to ensure they could participate in the future of mobile wallets, and not have the course of development for mobile wallets in Australia dictated by a single overseas corporation,” payments specialist and spokesperson on behalf of the applicants, Lance Blockley, said.

“The application attracted strong support from many of Australia’s leading retailers and other financial institutions who also recognise the public benefits of open NFC access, and the subsequent flow on benefits for mobile wallet innovation and competition in Australia,”

“Whilst we thank the ACCC for their time and diligence in reviewing our application, and recognising both the imbalance in negotiating positions and that there were real issues for consideration, we are disappointed that the finely balanced draft determination was not tipped in the final decision, given our considerable effort to demonstrate the public benefits inherent in open NFC access, and the subsequent flow on benefits for mobile wallet innovation and competition in Australia.”

We won’t see any immediate rush to adopt Apple Pay from these banks, that would be a bad look – all we can hope for is more consumer pressure on the banks to force them to step up and offer the service to consumers.