Apple has called for the Australian Competition and Consumer Commission (ACCC) to refuse an interim authorisation for some of Australia's big banks -- the Commonwealth Bank of Australia, National Australia Bank, Westpac, and Bendigo and Adelaide Bank -- to join forces to collectively negotiate with third-party mobile wallet providers, such as Apple, on conditions relating to competition, best practice standards, and efficiency and transparency.
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At the end of July, the banks collectively requested for the ACCC to grant initial interim authorisation within 28 days to allow them to commence negotiations on limited issues while the consumer watchdog considers the application for authorisation.
The main goals the banks want to achieve through negotiations include ensuring there will be non-exclusive access to a mobile near-field communication (NFC) chip, which would open up opportunities for other third parties, such as retailer loyalty programs or transit companies, to access the wallet; standardised security standards across the mobile payment system; and price transparency for payment system transaction costs in Australia, which is in line with the Reserve Bank of Australia's policy.
However, in its initial submission to the ACCC, Apple has strongly urged the commission to reject the interim authorisation, saying if granted, the request "would harm consumers, lead to less competition and less innovation, and create a troubling precedent".
"The request by the applicant banks would slow innovation and reduce choices by protecting members of the cartel from competition with each other for the next three years. The banks would have little incentive to compete amongst themselves to develop the best and most innovative payment services for their customers," Apple wrote.
The technology giant has claimed the real motivation behind the request by the banks is to "maintain complete control over their customers", and "force" Apple and other third-party providers to accept their terms, which it believes would allow the banks to charge consumers that choose to use Apple Pay.
"The present application is only the latest tactic employed by these competing banks to blunt Apple's entry into the Australian market," it said.
Apple also accused the banks of having a "limited understanding" of Apple Pay.
"The applicants rely on innuendo and misstatements to support their application. Most have little direct insight into Apple Pay or Apple's terms (case in point, one applicant bank has refused to even enter into a confidentiality agreement with Apple to allow for preliminary discussions about the terms under which it would participate in Apple Pay)," it said.
Additionally, Apple believes if the request is granted to the banks, which would potentially see Apple required to provide access to its proprietary hardware and software related to the NFC antenna found in certain Apple products, it would undermine the security of Apple Pay and put customers are risk.
"Apple upholds very high security standards for our customers when they use Apple devices to make payments. Our hardware, software, and services are built in a deeply integrated manner so we can provide the highest possible security. Providing simple access to the NFC antenna by banking applications would fundamentally diminish the high level of security Apple aims to have on our devices," the company said.
Apple also argued the banks have failed to provide "compelling" reasons to justify how if they were not granted the request it would bring about anti-competitive behaviour.
Currently, the only banks that have signed up to offer Apple Pay in Australia after it launched in November last year are American Express and ANZ Bank.
Novantas senior advisor Lance Blockley on behalf of the banks recently revealed ANZ had initially lined up to join the fight, but then changed tack and joined with Apple Pay.
"One of the applicants was ANZ Bank," he said.
"They chose to pull a fast one on their competitors and their joint applicants earlier this year when they withdrew from the group of applicants and decided to negotiate separately with Apple."