* ACCC decision bars collective bargaining on Apple Pay
* Banks wanted access to Apple's contactless payment
* ACCC did not want to force Apple to act like Android
(Recasts, adds interviews, bank comments)
By Jamie Freed
SYDNEY, March 31 Apple Inc on Friday
won a victory in its global fight to prevent banks from
introducing their own mobile payment services on Apple devices,
as an Australian regulator barred lenders from bargaining
collectively for access.
The decision by Australia's competition watchdog, the first
of its kind, will stop the banks from introducing their own
mobile applications on iPhones and Apple Watches that could be
used for contactless payments instead of the Apple Wallet.
The banks had hoped to circumvent transaction fees and get
customers to engage more frequently with their own apps,
potentially unlocking more of Australia's contactless payment
market valued at an estimated $84 billion a year.
"It will have global implications," Australian Competition
and Consumer Commission Chairman (ACCC) Rod Sims told Reuters
after the ruling came down.
"If others need to think it through ... we’ve at least got
something out there which they can kick off from."
A win by four of the largest Australian banks involved in
the case, which command two-thirds of the nation's credit card
market, would have given them more negotiating power and could
have sparked similar appeals to regulators for access to Apple's
systems in other jurisdictions around the world.
Apple does not allow any of its 3,500 bank partners in 15
global markets access to the near-field communication (NFC)
technology behind its payment system.
The Australian regulator was concerned that giving the banks
bargaining power could reduce competition by forcing Apple to
act more like Alphabet Inc, whose Google arm owns the
more open Android operating system that allows contactless
payments from individual apps.
"(Apple and Android) are very different offerings and they
have different implications for ease of use, security and
customer experience," Sims said.
"It is a tricky issue for a competition regulator to force
one competitor to adopt a strategy of the other competitor."
An Apple spokeswoman said it was a great decision for
Australians who wanted the "easiest, most secure and private
payment experience possible with Apple Pay".
The banks involved - Commonwealth Bank of Australia (CBA)
, Westpac Banking Corp, National Australia Bank
Ltd (NAB) and Bendigo & Adelaide Bank Ltd -
have yet to allow use of their cards with Apple Pay, which was
introduced to the country last year.
Australia and New Zealand Banking Group Ltd began
offering Apple Pay to customers last year after reaching a deal
with the U.S. company, while Macquarie Group Ltd and
ING Groep NV's ING Direct introduced Apple Pay in
ONE AT A TIME
Payments consultant MWE Consulting last year estimated the
Australian "tap and go" market at A$110 billion ($84.32 billion)
a year and growing, although to date more transactions are with
contactless cards than mobile phones.
Lance Blockley, a payments expert representing the four
banks involved in the Australian ruling, said they would now
review their strategies regarding Apple Pay individually.
"I suspect Apple will want to talk about Apple Pay rather
than NFC access," he said, referring to any future negotiations.
A Westpac spokeswoman said the bank remained open to
introducing Apple Pay, while CBA and NAB declined to comment and
Bendigo and Adelaide Bank could not be reached immediately for
Steve Worthington, a business professor at Melbourne's
Swinburne University of Technology, said the four banks that
battled Apple might now pay a financial price for doing so in
the form of higher fees for using Apple Pay.
"If you were in Apple’s shoes what would you do?," he said.
"Would you give them the same deal (as the early adopters) or
would you punish them by trying to make it more favourable to
($1 = 1.3084 Australian dollars)
(Reporting by Jamie Freed, Editing by Stephen Coates)