Finance

Australia’s banks are furious with Apple Pay, and they have a point

By Oliver Smith 28 July 2016
Summary

Contactless payments could soon be dominated by Apple, Google and Samsung.

We love Apple Pay. Forget your wallet or leave your bank card at home?

Not a problem, pay with your iPhone.

There is one issue.

Apple’s payments system built into the iPhone, which lets you tap and pay via contactless,is super-secure and uses military-grade security to keep your bank details locked down. Even if someone steals your phone.

Read more: Apple Pay one year on, flop or fabulous?

It’s so secure that banks must go through Apple to offer contactless mobile payments.

They can’t have their own ‘Apple Pay’ for iPhones.

And now a group of Australia’s biggest banks are angry at Apple’s behaviour, which could be seen as anti-competitive.

Want to load a bank card onto your iPhone to pay on the high street? Apple Pay is the only way.

Is Apple Pay anti-competitive?

The current way of things means that Apple is the only gatekeeper to making a contactless mobile payment on an iPhone, and it can take a cut of any transactions. It’s the same deal with Android Pay and Samsung Pay.

Obviously banks would like to offer their own mobile payments apps, maybe to compliment what Apple, Android and Samsung already offer? Like person-to-person payments by tapping iPhones together? Or how about letting smaller banking startups like Mondo and Atom Bank launch their own ways of making mobile payments?

Now around the rest of the world Apple Pay has been widely accepted by banks, maybe with the exception of Barclays stubbornly dragging its feet in Britain.

And in 2016 we take for granted the other areas where Apple has established itself as the sole gatekeeper, like the iPhone’s App Store where Apple takes a 30% cut on everything sold.

But as contactless payments grow – and they are simply booming at the moment – shouldn’t we have more competition in this space, not less?