The group of Australian banks taking on Apple over access to the NFC technology within iPhone handsets says the restriction is not only preventing the introduction of mobile wallet services across multiple platforms but also proving detrimental to continued investment into mobile payment apps.
In a 27-page submission to the Australian Competition and Consumer Commission (ACCC) this week, the four banks insist Apple’s restriction is fragmenting the customer experience and, without access, there “simply will not be the same incentives and ability to innovative” on either the iPhone platform or other alternatives.
“In Australia, approximately 40% of smartphone sales are iPhones,” the banks say. “However, the value and importance of the iPhone customer segment for app uptake, use and expenditure far outweigh this share.
“For example, iPhone users account for 60% of mobile banking transactions and 70% of mobile application revenues in Australia. The tendency of iPhone users to embrace mobile payments, engage in mobile applications and adopt new technologies is particularly important in relation to technology such as mobile wallets.
“The average iPhone user is more likely to adopt and value the ability to make integrated mobile payments as well as influence a more widespread adoption of this technology. iPhone users tend to be wealthier and likely to conduct more and undertake larger transactions. They are also more engaged and attached to their mobile devices than Android users.”
“Apple’s insistence on exclusive access to NFC functionality prevents mobile wallet providers from multi-homing — that is, making their apps available on multiple platforms — in turn preventing them from reaching the smartphone users they need to make continued investment in these apps worthwhile,” the banks add.
“Further, without access to the iPhone’s NFC functionality, there simply will not be the same incentives and ability to innovate for the benefit of Australian customers on either the iPhone platforms or other platforms.”
Bendigo and Adelaide Bank, Commonwealth Bank of Australia, National Australia Bank and Westpac Bank submitted their request for negotiation to the ACCC in July 2016. Apple spoke out for the first time about the banks’ submission in August, saying it was made up of “factual and legal misstatements,” later insisting that opening up access to the NFC technology within its handsets is “not open to negotiation with any bank”.
In an extensive response to the ACCC published last month, the banks criticised Apple’s decision to restrict access to the NFC within its handsets, calling it “completely baseless.” Apple responded to the claims last week, accusing the four banks of being “not interested” in promoting mobile payments competition within Australia.