Apple wants Australia to keep payments regulatory regime as is

Apple has recommended that no changes be made to Australia’s financial services regulatory framework, saying that if there are any reforms they should not undermine innovation or lead to less secure or less private solutions for consumers. .

“Apple believes the current Australian regulatory framework encourages and fosters innovative developments that offer competition to incumbent banks, while minimizing the risks associated with technological developments and broader structural changes in the economy resulting in new forms of payment.” Apple said in a statement. submission [PDF] to the Joint Parliamentary Committee on Corporations and Financial Services.

“Apple believes that policies or regulations that seek to prescribe or dictate a technical approach are unnecessary and create serious unintended consequences, including compromising the security of payment systems and stifling innovation that benefits customers, banks and customers. to the payments industry at large. “

The iPhone maker told the committee that Apple Pay is an “example of the dynamic competition and innovation that characterizes the payments markets globally and in Australia.”

The committee recently opened an investigation into mobile payment and digital wallet financial services, with particular reference to the nature of business relationships and business models, including any imbalances in bargaining power between digital wallet service providers. mobile payment and financial services, merchants and sellers. , and consumers.

Other authors, including the Reserve Bank of Australia, the Australian Competition and Consumer Commission (ACCC), and the Commonwealth Bank of Australia (CBA) had previously raised concerns with the Committee about the growing monopoly of “big money”. technologies’ in the area of ​​payments, with The ABCs going so far as to say that mobile device makers are acting as a “gatekeeper”.

Read more: Tech giants accused of “guarding” mobile payments in Australia

Apple said its only role was to develop the technical architecture that can be used by authorized financial institutions to provide their consumers with a “safer and more secure way to pay with their credit, debit or prepaid cards.”

“Apple does not issue credit, debit, or prepaid cards, and does not process, authorize, or execute transactions. Apple is not a bank, financial institution, or payment service provider,” Apple said in its submission. “Rather, Apple has partnered with banks and other financial institutions to enable them to securely store payment information on Apple devices.”

Apple actually has its Apple Card, which is a credit card created by Apple and issued by Goldman Sachs, as well as iTunes gift cards, which the ACCC says have been used in nearly 430 scams reported worth of AU $ 853,000,

Cupertino also said it is not preventing its partners from developing their own iOS apps, or supporting mobile payments or alternative presentation methods.

“Indeed, every major Australian bank has an iOS mobile banking app… Australian banks are able to initiate an NFC payment or read data via NFC directly from their iOS apps, and / or operate alternative technologies for making mobile payments, ”the submission says. added.

“In addition, Apple has allowed banks to initiate NFC payments directly from their iOS apps. This allows banks / card issuers to offer very differentiated services. A good example is the Afterpay iOS app.

CBA, alongside Westpac, National Australia Bank (NAB) and Bendigo and Adelaide Bank, joined forces in 2016 to attack Apple and its control over its own near-field communication technology (NFC ), annoyed that Apple did not allow any other entity to directly access its technology.

The group argued that access would allow them to offer their own integrated digital wallets to iPhone customers competing with Apple’s digital wallet without using Apple Pay – something Apple wanted to avoid.

The banks lost this fight four years ago, the ACCC having rendered a decision refusing approval.

Since then, banks have given in and now offer their customers Apple Pay.

“The Apple Pay architecture is available to any card issuer that can meet the technical and business requirements of Apple Pay,” said Apple.

“Card issuers have equal access to this architecture: all card issuers pay the same fees and are subject to the same general conditions in their territory, regardless of their size and each card issuer is presented equally in the user experience.

“Apple has focused on innovation in payments while providing Apple technology on a non-discriminatory basis.”

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