Banks set to lose Apple Pay NFC fight

Australia's biggest banks look set to lose their fight to collectively pressure Apple to open up the NFC in its iPhones after the competition watchdog revealed it intends to block the campaign.

Westpac, NAB, CBA and Bendigo and Adelaide Bank asked the ACCC in July to let them form a cartel for the purposes of bargaining with and boycotting Apple on its Apple Pay payments platform.

They wanted to push Apple for access to its near-field communication (NFC) chips in its iPhones, and to drop its restriction on passing on Apple Pay fees to customers.

After months of back and forth between the parties over the debate - which has seen supermarket giant Coles and Australia's retail lobby lend their support to the banks - the ACCC has now said it intends to block the campaign.

The watchdog issued a draft determination today proposing to deny the banks' request to form a cartel for lobbying and boycott purposes.

Chairman Rod Sims said the ACCC wasn't satisfied that the benefits of the effort outweighed the likely detriments to competition.

The banks had argued increased competition and choice, innovation and investment, greater pricing efficiency, and greater consumer confidence would flow from them being allowed to collectively bargain with Apple.

“While the ACCC accepts that the opportunity for the banks to collectively negotiate and boycott would place them in a better bargaining position with Apple, the benefits are currently uncertain and may be limited,” Sims said in a statement.

He said banks could offer their own competing apps on iPhones without having access to NFC.

Allowing them to collectively neogitate would reduce the competitive tension between those banks talking to Apple individually, which could have a negative flow-on effect to iPhone mobile payment services, the ACCC said.

It also said the three-year boycott period the banks were pushing for in order to negotiate with Apple would result in decreased choice for their customers.

The ACCC is seeking feedback on its draft determination before making a final decision in March next year.

ANZ Bank is the only major bank to currently offer its customers Apple Pay. The service is also available to American Express customers and Cuscal's 31 financial institution partners.

In response to the ACCC's draft decision, the four banks said while they were disappointed they would continue pushing to collectively lobby Apple.

“If the draft determination of the Australian competition regulator stands, effectively there will be no competition against Apple for mobile payments on the iPhone,” spokesperson Lance Blockley said in a statement.

“The application has never been about preventing Apple Pay from coming to Australia or reducing competition between wallets. It has always been about providing consumer choice and innovation."