A consortium of Australia’s biggest banks aims to gain access to the iPhone’s NFC antenna, which is what makes contactless payments on mobile phones possible. Initially attempting to negotiate a bloc with Apple, the banks responded to Apple’s claims of them attempting to block the expansion of Apple Pay into Australia by calling such claims “conspiracy theories.” Even though the banks have invested in their own payment technologies, they fear that any competition with Apple Pay will be severely one-sided. The banks are also attempting to gain permission to negotiate together, boosting their negotiating power, a move the Australian Retailers Association supports. Apple claims that restricting access to the NFC antenna to their own apps is crucial to the security and usability of the system.
Apple Pay is not the only mobile payment application on the market – Android Pay, Samsung Pay, Chase Pay, and Bronco Pay (OK that last one doesn’t exist yet) are other mobile payment services that are being accepted at more and more businesses, though Apple Pay is probably the most ubiquitous. As mobile payment services become more popular, it would be remiss for banks to not try and get a foothold in the market as well.
However, I do think that the banks may be wasting their time trying to get Apple to grant them access to the NFC antenna on iPhones. Doing so could set a precedent forcing Apple to grant other banks across the world similar access. This probably wouldn’t hurt the iPhone’s usability, but it would negatively affect their ability to maintain their competitive advantage of using their closed app ecosystem to better maintain a quality standard of apps on their app store. It is difficult for me to see Apple folding on this just because the banks demanded them to, but at the same time Apple needs the banks’ cooperation to bring Apple Pay to Australia. Whether the banks may be better off fighting Apple or giving up and relying on the open ecosystem of Android must be a question on the banks’ mind.
Great post about the competition. I heard about the same kind of situation in US as well for the introduction of the mobile wallet when Apple, Samsung and banks were fighting and trying to negotiate their authority.