The element of digital wallets is quickly becoming part of society. It is headed to being a core platform for all payments in the future. It is for this reason that Apple Inc. (NASDAQ:AAPL) has been swift in introducing its Apple Pay, which has been launched to CUA customers. The platform will allow them to use their CUA Visa Debit card whenever they are making any transactions. Apparently, this comes at a time when Australia’s big banks and tech giant Apple are involved in a tug of war over the payment platform.
But what is the war between Australia’s largest banks and Apple all about?
The quiet battle that has been going on for over a year is all about forcing Apple to open access to the iPhone’s NFC chip. In fact, the banks want non-exclusive access to the NFC chip, which would in return create room for collective bargaining over Apple Pay. However, the world’s largest technology company will hear none of this. Thus, the situation remains hanging in the balance awaiting determination by the Australian Competition and Consumer Commission (ACCC).
Apple holds restricted power over NFC technology in its phones. As of now, Australian banks would need to sign up for Apple Pay to offer NFC payments. They would also have to agree to pay the merchant fees that Apple levies on every transaction made using the system. However, the banks do not want anything for free but are quoted saying “on reasonable terms.”
The banks have an alternative, Apple says
While Apple keeps its grip tight, it has suggested various options that banks can explore without necessarily having to sign up for Apple Pay. They include NFC stickers, Android apps, and an iOS banking app but the banks claim that the alternatives are not adequate to serve the larger Australian community. The bank’s submission to ACCC reads, “The average iPhone user is more likely to adopt… integrated mobile payments. iPhone users tend to be wealthier and likely to conduct more transactions.”
With all this argument, the banks are now looking up to ACCC to compel Apple to open up the iPhone’s NFC. Meanwhile, Apple’s stock closed at $105.71 a decrease of $2.72 or 2.51%.
