It's fair to say that Apple's devices are pretty popular around the world. According to data website Statista, the one billionth iPhone was sold in 2016, with the iPad tablet clocking up 300 million sales, according to the same source.
From smartphones, computer devices and smartwatches, Apple have long led the way when it comes to technological innovation, and now the company is looking to make its mark in the payment industry via Apple Pay.
This development is a mobile payment and digital wallet service, which allows its customers to pay for goods by using their existing Apple device, whether that's an iPhone, iPad or even the Apple Watch. However, things are not going as smoothly for Apple Pay in Australia as the tech giant might like – with three of the major banks refusing to bow to their needs.
From smartphones, computer devices and smartwatches, Apple have long led the way when it comes to technological innovation.
Apple is saying that the Commonwealth Bank of Australia, NAB and Westpac, amongst others, want to collectively negotiate over digital wallet access to the iPhone, which Apple believes will put the security of the handset at risk. Additionally, Apple argue that such a move could reduce innovation and put the brakes on Apple's initial movements into the Australian payment markets.
Currently, Apple have locked third-party providers of digital wallets (such as banks) from the iPhone, so that Apple Pay is the only way to make transactions with the device. Why are the aforementioned banks so angry at this move? Simple – it could be costing them millions of dollars in interchange fees, but that's not the only source of their ire.
Because Australia has an existing excellent contactless payment capability, the big banks, and in fact virtually the whole payments industry in Australia, somewhat justifiably feel aggrieved that Apple want a big chunk of the interchange fees without bringing anything to the party. The platform for contactless payments was built long before Apple arrived, so it's perhaps understandable that the local industry which actually helped lay the foundations is generally standing their ground – after all, Apple's big rivals, Android, are perfectly happy to play ball with their Android Pay function.
Android are simply happy to access the Australian contactless payment platform so that its Android device functionality is enhanced (and they might sell more Android devices) which is in stark contrast to Apple. Apple doesn't do anything for free, and is looking to be paid big money so that Australian consumers get to have Apple Pay access if you have an iPhone. Google's Android Pay is already out there and working in Australia.
Apple have been locked in battle with three major Australian banks, and others, over contactless payments for some time. However, word is that an agreement has finally been reached and Apple Pay will shortly be seen in Australia, but only on the latest model iPhones. This is because Apple will want you to upgrade – no surprise here.
The platform for contactless payments was built long before Apple arrived, so it's understandable that the local industry is generally standing its ground.
Internet banking, such as CAPE's, will still work, but Apple has put a block on the iPhone's antenna so that contactless payments from the banking sector (aside from ANZ, which has struck up a deal with Apple) won't.
How do like them apples?
Apple are claiming that security is their main concern, stating that opening the phone's antenna to the banks would severely compromise the high digital safety standards that the company upholds.
"Unfortunately, and based on their limited understanding of the offering, the [banks] perceive Apple Pay as a competitive threat. These banks want to maintain complete control over their customers. The present application is only the latest tactic employed by these competing banks to blunt Apple's entry into the Australian market," said Apple in a statement to the Australian Competition and Consumer Commission.
Though it's unclear how this colossal battle might pan out, it once again highlights the greed of big business, putting profits before the customer. There is no real winner in this scenario, with the customer losing out if the impasse remains. With the headstrong Apple and the might of the major banks at loggerheads, it's a stand-off that could rumble long into the future – a situation no one really wants.
At customer-owned CAPE, our members are always top of the list of our priorities – whether they own an iPhone or not! With this in mind, be sure to get in touch with us to find out more about our offerings – we look forward to welcoming you on board!