Banks surrender in Apple Pay fee fight

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Banks surrender in Apple Pay fee fight

Narrow argument to NFC access.

Australia's big banks have backed down from their push to be allowed to pass on Apple Pay fees to their customers after the technology giant accused them of trying to discourage use of its platform.

In the latest episode of an ongoing spat between Apple and Westpac, NAB, CBA, and Bendigo and Adelaide Bank, Apple last week accused the four of free-riding on its investment into the payments platform, and of deliberating delaying its local growth.

The banks have been lobbying the ACCC to allow them to form a cartel so they can pressure Apple into opening up the near-field communication (NFC) chips in its iPhones, and to drop its restriction on passing on Apple Pay fees to their customers.

In its draft decision on the matter last November, the ACCC knocked back the banks' request. It will make its final decision next month.

Last week Apple accused the banks of using the NFC argument - in which they want the chip opened up so they can offer their own iOS-based payment services - as a smokescreen to try and avoid being stuck with the fees associated with Apple Pay.

Apple requires banks to give it a cut of the interchange fees associated with Apple Pay, but it doesn't allow banks to recoup these costs from their customers.

In the US, issuers must pay 0.15 percent of a credit card transaction and 0.5 cents for each debit card transaction, and 7 cents to Visa and 50 cents to MasterCard for each card that is added to an Apple wallet.

Today the four banks said they would drop the fee argument and narrow their ACCC push to focus solely on access to the NFC, given the ACCC's concerns that passing on the Apple Pay costs may "lead to a public detriment".

"The applicants flatly reject Apple's unsupported assertions that the application is about an objection to the fees that Apple wishes to impose, rather than NFC access. Apple’s conspiracy theories about “Trojan horse fees” are similarly dismissed by the applicants as fantasy," they wrote.

“This application has always been about consumer choice, and allowing competition between the makers of mobile wallets to offer the best products and features they can to determine which mobile wallet consumers will use. 

"The applicants want to put up their digital offerings head to head with Apple Pay, and let the market and individual consumers decide which best suits their needs."

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