Apple Pay dispute about tech access, not fees, Aussie banks say

[SYDNEY] A consortium of Australia's biggest banks has abandoned its attempt to negotiate as a bloc with Apple Inc over the cost of using its mobile payment system, narrowing its claim to focus solely on access to a key piece of iPhone technology.

In their final submission to the competition regulator, the banks hit back at earlier claims by Apple that the dispute was fundamentally an attempt to "delay or even block" the expansion of Apple Pay into Australia. Apple's "conspiracy theories" are "fantasy", the banks said in an accompanying e-mailed statement Monday.

The banks - Commonwealth Bank of Australia, National Australia Bank Ltd, Westpac Banking Corp and Bendigo & Adelaide Bank Ltd - are seeking permission from the regulator to negotiate together to boost their bargaining power with the US tech giant.

Having invested in their own payment technology, they fear being sidelined as mobile wallets gain in popularity. Apple is the worldwide leader in mobile in-store payments, although in the US it has been facing increasing competition.

By dropping their bid to negotiate together on fees and focusing solely on technological access, the banks are seeking to put the regulator's focus onto Apple's restrictions and tip the decision their way. In a draft ruling in December, the Australian Competition & Consumer Commission refused permission for the banks to negotiate collectively, but said the decision was "finely balanced".

In their filing to the ACCC, the banks said they all pledged to participate in the roll-out of Apple Pay in Australia in return for being granted access to the iPhone's near-field communications antenna - the technology that makes payments on contactless readers possible.

"Without open NFC access on iPhone, no genuine competition in the provision of mobile wallets is possible and Apple will have a stranglehold on this strategically important future market," the banks said in their statement.

Retailers' Support

In a separate submission supporting the banks, the Australian Retailers Association said the opportunity to negotiate collectively would benefit "all banks, merchants, app developers and ultimately customers in Australia and overseas".

Google's rival Android operating system allows third-party apps to access NFC technology. Apple has restricted access to its own apps and says giving others access would undermine the security and usability of the system.

Australia & New Zealand Banking Group Ltd isn't a party to the action, having decided in April to accept Apple Pay.

The regulator is expected to hand down its final decision in late March.

BLOOMBERG