ACCC says Apple Pay will boost card competition
Apple Pay’s ability to toggle through different payment cards was seen as pro-competitive by the Australian Competition and Consumer Commission and became one of the key factors leading the regulator to favour Apple over the banks.
In an interview with The Australian Financial Review after the ACCC knocked back an application by the banks to collectively negotiate with Apple over access to the iPhone’s “near field communication” (NFC) controller, ACCC chairman Rod Sims said the banks’ arguments that such access could increase competition for digital wallets were “strong” – but the regulator always has to be cautious about intervening in markets.
At a time when the industry is looking for ways to encourage switching between banks to improve competition, Mr Sims said he was concerned the banks would attempt to create “such an attractive digital wallet that they would lock people into their services”.
It is likely proprietary bank digital wallets will only allow payments to be made with that bank’s own cards. In contrast, Apple Pay lets its flick between whatever payment cards have been loaded onto the wallet.
“Apple Pay is multi-card and it could reduce the lock-in effect that is a barrier to switching between banks,” Mr Sims said. “The whole switching argument is very big in terms of why there isn’t more competition in banking”.
At present, only cards from ANZ Banking Group, Macquarie, ING, CUA and around 30 other customer-owned banks can be loaded onto Apple Pay because Commonwealth Bank, National Australia Bank, Westpac and Bendigo and Adelaide Bank have refused to do a commercial deal with Apple.
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