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ACCC proposal on Apple Pay bad for retailers, says ARA

The ACCC has proposed to deny authorisation for a number of Australian banks to engage in limited collective bargaining and boycott with Apple in relation to Apple Pay.

Bendigo and Adelaide Bank, Commonwealth Bank, National Australia Bank and Westpac sought authorisation on behalf of themselves and potentially other credit and debit card issuers to engage in limited collective negotiation with Apple on two key issues:

  • Access to the near-field-communication (NFC) controller in iPhones. Such access would enable the banks to offer their own integrated digital wallets to iPhone customers in competition with Apple’s digital wallet without using Apple Pay.
  • Removing restrictions Apple imposes on banks, preventing them from passing on fees that Apple charges the banks for the use of its digital wallet.

The ACCC is not currently satisfied that the likely benefits from the proposed conduct outweigh the likely detriments.

“While the ACCC accepts that the opportunity for the banks to collectively negotiate and boycott would place them in a better bargaining position with Apple, the benefits are currently uncertain and may be limited,” ACCC Chairman Rod Sims said.

The Australian Retailers Association says it believes the ACCC’s draft determination will restrict Australian retailers and ARA Executive Director Russell Zimmerman says the association will continue to support innovative payment technology on behalf of the retail sector.

“The ARA is excited for the opportunities that mobile wallets can bring to our members and customers, with the potential to make life simpler for customers, and at the same time deepen relationships with merchants,” he said.

“However, we believe the full potential for mobile payments cannot be fully realised without the opportunity to offer innovative new services across retail, transport and other sectors. These industries are built on open access to NFC technology across all major mobile platforms, including iPhone, without bottlenecks or restrictions on features.

The ACCC will seek submissions in relation to this draft determination before making its final decision in March 2017.

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