Apple is fighting with the big four Australian banks over fees, as it tries to break into the country’s payment market.
The banks are reluctant to cede a portion of the A$2 billion they earn annually from merchants for the use of payments infrastructure.
Apple is rumoured to earn 15 cents on every $100 of transactions in the US and has requested the same amount in Australia, but the banks will not agree as they pay around half the level of fees paid in the US.
Apple Pay launched in the UK last month and in the US in October 2014, facilitating payments from an iPhone 6 or Apple Watch at contactless terminals. The system can’t operate in a new territory without the technology giant first reaching agreement with banks to use their infrastructure.
Apple Pay performed well in the US because it was launched when contactless payment was a new technology, but the market is more mature in Australia. The Commonwealth Bank of Australia (CBA) has already offered contactless payment to android users for two years through its app.
Ian Narev, chief executive of CBA, said Apple may struggle to break into the Australian market, commenting: “By most global standards, the capability that the Australian banking sector has generally, and Commonwealth Bank has specifically, to provide for customers is ahead of a lot of the other markets around the world where Apple has done well. There is functionality associated with Apple Pay that we have had in the market for 18 months to two years.”
Narev went on to say that regardless of the situation with Apple, the big tech companies will have an influence on financial services as the functionality of smart phones shapes the market: “If it not Apple, it might be Google; if it is not Google, it might be Samsung; if it is not Samsung, it might be Amazon; if is it not Amazon, it is going to be someone else.
“Are we going to be able to sit here today and pick the major winners? No. But the disruption is structural. It is only going one way.
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