Apple is 'Intransigent, Closed and Controlling' Say Banks (afr.com)

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Apple is 'Intransigent, Closed and Controlling' Say Banks (afr.com)

Posted by msmash on Tuesday October 18, 2016 @06:10AM from the my-way-or-highway dept.

Apple is increasingly trying to get banks to implement its Apple Pay mobile payments solutions, but some banks are avoiding Cupertino giant's offer, saying that the company is "closed and controlling". From a report on Financial Review: Three of Australia's big four banks have described technology giant Apple as being "intransigent, closed and controlling" and accused it of attempting to freeload on their contactless payments infrastructure while slowing innovation in digital wallets. In an increasingly acrimonious dispute, Commonwealth Bank of Australia, National Australia Bank, Westpac Banking Corp and Bendigo and Adelaide Bank are arguing that the engineering of Apple iPhones prevent them from delivering mobile wallets to millions of customers. This is because Apple Pay is the only application that works with the iPhone's "near field communication" (NFC) antenna, which communicates with payment terminals. In their latest, 137-page submission filed with the competition regulator, the banks argue that by locking them out, "Apple is seeking for itself the exclusive use of Australia's existing NFC terminal infrastructure for the making of integrated mobile payments using iOS devices. Yet, this infrastructure was built and paid for by Australian banks and merchants for the benefit of all Australians."

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I hope Apple Pay will die by fred6666 · 2016-10-18 06:12 · Score: 5, Insightful

We don't need yet another middle man charging yet another fee. And no, Apple Pay is not free for the end user. There is a hidden fee charged to the bank, which end up being charger to the merchant, which end up being charged to the consumers one way or another.
1. Re:I hope Apple Pay will die by bondsbw · 2016-10-18 06:17 · Score: 2
  
  Competition is good. But the competing products and services aren't always good.
  
  --
  All my liberal friends think I'm a conservative, all my conservative friends think I'm a liberal.
2. Re:I hope Apple Pay will die by barc0001 · 2016-10-18 06:18 · Score: 3, Informative
  
  Same with "rewards" programs, Airmiles, etc. That stuff isn't free either. Merchants get hit for it, and end up passing that on to everyone in the form of inflated prices. Seriously, how could they not? If a merchant's margin on something is 10% and paying for it with a cashback card takes 1% on top of the 1-3% already charged for using the credit card, of course the merchant's going to do something about that vanishing margin.
3. Re:I hope Apple Pay will die by bbeagle · 2016-10-18 06:19 · Score: 5, Informative
  
  Apple Pay charges merchants 0.15% which is right in line with MasterCard, Visa, American Express and Discover. https://www.cardfellow.com/cre...
4. Re:I hope Apple Pay will die by Old97 · 2016-10-18 06:28 · Score: 5, Informative
  
  Apple Pay doesn't charge the merchants at all. It's the card issuers who pay Apple and they are will to do so because Apple Pay is much more secure than their own systems - chips and strips. It saves the banks money because it drastically reduces the fraud rate. So, no consumers are not paying for this. Another feature of Apple Pay (and Google's version) is that you aren't tied to a bank, a credit card (VISA, MC, etc.). That's what the banks don't like. They want to own the relationship.
  
  --
  Very often, people confuse simple with simplistic. The nuance is lost on most. - Clement Mok
5. Re:I hope Apple Pay will die by Anonymous Coward · 2016-10-18 06:43 · Score: 2, Insightful
  
  Because after a while you are no longer thinking do they accept Mastercard, Visa, or Amex. You are thinking do they take apple pay. When you pull out your payment method, people aren't seeing the Credit logo, they are seeing an iPhone or Android variant. This is about mind share.
6. Re:I hope Apple Pay will die by SolemnLord · 2016-10-18 06:53 · Score: 2
  
  Fair enough! I'm looking at this as a Canadian, where Interac (our debit payment system) has been ubiquitous my entire adult life- literally the only time I can't use it up here is with Square- so worrying about if they'll take a certain card* honestly feels absurd to me.
  *Not everyone has an NFC-capable payment, though, and some of them are finicky enough that I have to pull the card out anyway.
7. Re:I hope Apple Pay will die by saloomy · 2016-10-18 07:18 · Score: 3, Informative
  
  Apple Pay is a net-positive value to the consumer, because the risk rates are lower. As a merchant, your processing charges are smaller with Apple Pay than with swipe or web form. Apple has innovated to create Apple Pay by making contactless payments simple to manage and administer, creating the platforms and hardware to use them (phone, watch), and bringing tokenization to the payment processing system (true Apple Pay vs. just NFC payment).
  
  Another net positive for the consumer (IMHO, depends on who you ask), is that merchants can't track one-time payments for goods, because the payment info always change. This was the primary sticking point between walmart, et al, and the current crop of mobile wallets. They created MCX specifically so they would obtain mobile payments and still retain the data analytics that consumer spending gives these retailers.
8. Re:I hope Apple Pay will die by serviscope_minor · 2016-10-18 07:45 · Score: 4, Insightful
  
  Apple Pay is a net-positive value to the consumer, because the risk rates are lower.
  My credit card already indemnifies me against fraud, so the risk is already negligible.
  As a merchant, your processing charges are smaller with Apple Pay than with swipe or web form.
  Really? The fees are better than Amex, worse than debit cards. IOW they're about in line with other credit cards.
  Apple has innovated to create Apple Pay by making contactless payments simple to manage and administer
  Contactless payments were already simple to manage and administer.
  creating the platforms and hardware to use them (phone, watch)
  Um, how is creating contactless payment hardware innovation when contactless payments were already very widespread.
  
  --
  SJW n. One who posts facts.
9. Re:I hope Apple Pay will die by fred6666 · 2016-10-18 07:50 · Score: 4, Insightful
  
  Except the USA, pretty much every one has moved out of the magnetic swipe payments. Apple Pay do not have enough benefit over regular chip+pin (which can also be contact-less) cards to justify yet another middle man.
  And Apple Pay will never replace chip+pin cards simply because not everybody has an iPhone. Therefore the global payment system will always need to support payments method others than Apple Pay. A castle is as insecure as its weakest door. Apple Pay doesn't address the problem of the weak door at all, and therefore adds no added security to the global payment system.
  It does have some privacy benefits. But go ahead and charge that 0.3% (or whatever) fee directly to the customer and see how much the average user cares about that. Why do you have to force that fee down the throat of those who do not want it?
10. Re:I hope Apple Pay will die by Anonymous Coward · 2016-10-18 07:56 · Score: 3, Insightful
  
  Its a middleman that i not collecting data and on selling it to advertisers.
  THAT is a large part of the bitching, the Banks get a secure payment, but they no longer get what it was for. This buggers up their marketing/selling of your info.
11. Re:I hope Apple Pay will die by Carewolf · 2016-10-18 07:59 · Score: 2
  
  Why? You don't like competition?
  No I think he wants it to die because he likes competition. As long as Apple has their own system they will not allow competition on the world's most widely used mobile platforms.
12. Re:I hope Apple Pay will die by fred6666 · 2016-10-18 08:06 · Score: 2
  
  Apple Pay doesn't charge the merchants at all. It's the card issuers who pay Apple and they are will to do so because Apple Pay is much more secure than their own systems - chips and strips. It saves the banks money because it drastically reduces the fraud rate. So, no consumers are not paying for this.
  
  The banks are not willing to do so. They do it because they are forced to do it. That's why Apple Pay is not available in most countries.
  Banks do not want Apple Pay. Users want Apple Pay. Because they think it's cool. And it appears free (even if it's not). When one bank start accepting Apple Pay, users want to move to that bank. So other banks react by offering Apple Pay too. And all banks pay the fee. The fee is passed to the merchant, and in the end to the consumer.
  In the end, everybody loose but Apple.
  The payment system is exactly as it was before, using the very same terminals, no less hackable, the chip+pin and contactless payments options remain available. The only thing that changed is that there is a new middle man and a new fee.
13. Re:I hope Apple Pay will die by SolemnLord · 2016-10-18 08:07 · Score: 4, Insightful
  
  My credit card already indemnifies me against fraud, so the risk is already negligible.
  Apple Pay prevents fraud through its use of one-time codes, which is different from you being protected from fraud after the fact.
  
  Contactless payments were already simple to manage and administer.
  It's slightly more convenient (very slight, but you still notice when you have to pull out your card), and more secure, as I have to verify my identity either 1. through Touch ID as I hold the phone when making payment or 2. entering my Watch's passcode at the start of the day. I can't speak for the rest of the world, but in Canada debit contactless payments require a PIN every three transactions to reduce fraudulent charges from card theft and Apple Pay tied to a debit card does not, tacitly admitting that it's more secure.
  
  Um, how is creating contactless payment hardware innovation when contactless payments were already very widespread.
  Yeah, it's not really especially innovative. The ease-of-use and security factors plus Apple's shine, however, acted as a convenient way for consumers to apply some pressure to banks/merchants to update payment systems in the US.
14. Re:I hope Apple Pay will die by vux984 · 2016-10-18 09:03 · Score: 4, Insightful
  
  I can't speak for the rest of the world, but in Canada debit contactless payments require a PIN every three transactions to reduce fraudulent charges from card theft and Apple Pay tied to a debit card does not, tacitly admitting that it's more secure.
  I use contactless credit all the time and have never once ever had to enter a pin. I realize you said contactless *debit*; my wife does that but I never do, so i asked and she's NEVER had to enter a pin doing contactless *debit* either.
  And Yes. In Canada.
  
  Apple Pay tied to a debit card does not, tacitly admitting that it's more secure.
  WTF? If you enable apple pay you are required to use an unlock or fingerprint to approve each transaction. So Applepay doesn't require a pincode because it requires a fingerprint scan or an unlock code.
  
  It's slightly more convenient (very slight, but you still notice when you have to pull out your card)
  As opposed to pulling out your phone? Which might occasionally have a dead battery. Or maybe its raining or frigid or sweltering and your fingerprint scanner won't read your finger; so you try that 3 times before giving up and entering the passcode....
  Or maybe you have more than one card and you want to use a different card, so now you have futz around in settings to change which card to use.
  Frankly I find my credit card much faster to use. I don't have to unlock it. I don't have do anything but tap and go. The smartphone payment systems are universally LESS convenient.
  
  Yeah, it's not really especially innovative.
  No its not. Its a good implementation. But its not innovative.
  
  The ease-of-use and security factors plus Apple's shine, however, acted as a convenient way for consumers to apply some pressure to banks/merchants to update payment systems in the US.
  While the refusal to allow the use of alternative (non-applepay) payment apps is anti-consumer/anti-competitive and should be stomped on.
15. Re:I hope Apple Pay will die by Old97 · 2016-10-18 09:19 · Score: 2
  
  You don't give "all your banking information" to Apple. You scan your credit card and its sent to the bank that issued it. They approve it and your phone stores a code they bank created for the card installed on that device. Your data doesn't go to Apple. If you start by using the card you have for iTunes, of course Apple already has that. So Apple doesn't have your info nor does your device. Your device stores your code in a secure enclave on the chip. The OS can't get it either. Just the bank that issued the card. That's as secure as it gets.
  
  --
  Very often, people confuse simple with simplistic. The nuance is lost on most. - Clement Mok
16. Re:I hope Apple Pay will die by Old97 · 2016-10-18 09:22 · Score: 2
  
  Please try to pay attention. You don't pay anything nor does the merchant. The transaction fee paid by the merchant remains the same regardless of whether you use a card or Apple Pay. The fee is paid by the banks which they are willing to do because its a lot cheaper than the huge losses due to fraud they've experienced with credit cards.
  
  --
  Very often, people confuse simple with simplistic. The nuance is lost on most. - Clement Mok
17. Re:I hope Apple Pay will die by SolemnLord · 2016-10-18 09:29 · Score: 3, Insightful
  
  And Yes. In Canada.
  Totally willing to accept that I'm wrong on that (I was repeating what I've heard). I've never had a contactless debit (my card's getting old), so I jumped right from chip-and-pin to Apple Pay. So my bad.
  
  As opposed to pulling out your phone?
  I mentioned having a Watch, which is what I use. Pulling out a phone would arguably be easier than pulling out your wallet and then card, assuming you don have more than one contactless card (then you could just use your whole wallet. It's a minor convenience at best, but it's still a convenience.
  
  Or maybe you have more than one card and you want to use a different card, so now you have futz around in settings to change which card to use.
  On the Watch you literally just swipe to select the card you want. On the phone it acts like the Wallet app, with the default already selected. Any cards in the system have already been added beforehand, and the only reason to go into settings is to change the default card.
  
  While the refusal to allow the use of alternative (non-applepay) payment apps is anti-consumer/anti-competitive and should be stomped on.
  The thing is that I trust Apple to keep its secure enclave secure (and it's fair to argue that even that much is too much trust). I don't trust anybody else will. I'd love to see Apple open up the iPhone's NFC features, but at the same time I definitely don't want my payment information anywhere but the secure enclave. Hopefully a solution can be found.
18. Re: I hope Apple Pay will die by Luthair · 2016-10-18 09:40 · Score: 2
  
  Apple isn't letting the basis use the phones NFC, the banks aren't letting apple use the payment system NFC. Seems fair to me.
19. Re:I hope Apple Pay will die by thegarbz · 2016-10-18 09:43 · Score: 2
  
  Um, how is creating contactless payment hardware innovation when contactless payments were already very widespread.
  Oh no this is very innovative. It takes innovation to come up with something that is locked down to one service and needs to be negotiated and supported by banks.
  Without this innovation all you're left with is something like Google Wallet which worked everywhere, even in Australia, even when it never launched in Australia, even after Google's attempts to block it in Australia.
  THAT's innovation. A technology that works so well you lose control over it and it become part of the general and magically inter-operating kit.
20. Re: I hope Apple Pay will die by BlackSabbath · 2016-10-18 09:49 · Score: 5, Informative
  
  I'm sorry but that's just not true.
  The two systems are vastly different in implementation. Google are acting as a financial intermediary for every transaction through use of a "virtual credit card" which is what is on your phone and what the vendors see (they never see your actual cards as they are only on Google'a servers). As a result, Google have access and knowledge of every detail of every transaction you make using their system. This aligns with their panopticon business model. By effectively acting as a middleman financial institution they don't need any agreement with banks etc. Every transaction you make actually becomes two 1. Google pays vendor, 2. Google charges your bank.
  Apple are not doing this at all, instead they are securely storing your card details on the phone and communicating payment details to and from the vendor and your financial institution. Their system is designed so they don't store your card details nor know about your transactions. However this requires agreement with the financial institutions on the other end.
  http://www.investopedia.com/ar...
21. Re:I hope Apple Pay will die by ahabswhale · 2016-10-18 10:05 · Score: 3, Informative
  
  1) You may be indemnified against fraud but it doesn't mean the banks or merchants are. Generally, merchants end up eating that fraud.
  2) The reported fee for Apple Pay is about .15%, which is vastly lower than any credit card (or debit card) and banks are fine with it because the reduced fraud more than pays for it.
  3) Contact-less payments already existed but were nowhere near as secure.
  
  --
  Are agnostics skeptical of unicorns too?
22. Re:I hope Apple Pay will die by rbgaynor · 2016-10-18 10:06 · Score: 2
  
  That assumes chip and pin systems are all using tokenization (they aren't).
  
  --
  "Good things don't end with eum, they end with mania or teria." - H. Simpson
23. Re:I hope Apple Pay will die by MachineShedFred · 2016-10-18 10:23 · Score: 2
  
  Then clearly you've never been a victim of any kind of fraud.
  It's a total pain in the ass to have to log into every single thing that does electronic billing, or every single place you've ever saved your credit card for convenience (Amazon, PayPal, etc.) and change it because some fuckhead tried to skim your card.
  Skimming cannot happen with ApplePay, therefore the above simply could not happen, and I would not have lost several hours of my life to the inconvenience of payment card fraud.
  
  --
  Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
24. Re: I hope Apple Pay will die by BlackSabbath · 2016-10-18 10:44 · Score: 3, Informative
  
  It's ironic that you're calling Apple a middle-man when it's actually Google who are inserting themselves as a financial intermediary (were you aware that Google have issued you a virtual credit card?) and knowing every single transaction detail, which of course suits their panopticon business model. There's a reason they're not charging you for that privilege.
  Apple are acting as a payment communication medium, keeping no details of your transaction and yes, charging for the privilege. Whether it's worth it is in the eye of the beholder.
  This might help explain the differences between the two systems:
  http://www.investopedia.com/ar...
25. Re: I hope Apple Pay will die by BlackSabbath · 2016-10-18 10:49 · Score: 2
  
  It's 100% the other way around. Google store your full card details and full transaction details on their servers. All of it. All the time.
  It's why they're happy to take a hit. The ongoing value of that data FAR exceeds any per-transaction fee.
26. Re:I hope Apple Pay will die by gnasher719 · 2016-10-18 11:36 · Score: 4, Informative
  
  My credit card already indemnifies me against fraud, so the risk is already negligible.
  Your credit card company may indemnify you, but it doesn't prevent credit card fraud. Someone is going to pay for it. With Apple Pay, the merchant (or it's thieving store employee) never gets your credit card number, so they can't use it for fraud. If the merchant's hardware is hacked, they still can't get your credit card number or your money. Hackers who manage to somehow decode the communication between iPhone and card terminal can't get your money.
27. Re: I hope Apple Pay will die by Karlt1 · 2016-10-18 21:12 · Score: 2
  
  And all the hypothetical scamster gets is a one time use token that they couldn't use.
its difficult to dispute the position of Apple. by nimbius · 2016-10-18 06:18 · Score: 4, Insightful

There are more than four-thousand banking corporations in the Uniited States alone.
1. Does the aggregate of Australias banking industry authentically believe each corporation should be permitted their own programmatic implementation of contactless banking?
2. who or what will be liable for breeches in security? as of this foul year of our lord 2016 banks are often furiously reticent in disclosing security breeches let alone taking responsibility for them.
3. what if any qualifications does a banking institution have that define it as a cogent source for software? Apple has been developing quality hardware and software for a generation now.

--
Good people go to bed earlier.
1. Re:its difficult to dispute the position of Apple. by cmiller173 · 2016-10-18 06:28 · Score: 4, Interesting
  
  1. Yes, although they as well as most reasonable people realize that smaller institutions and even many large institutions will leverage the software acumen of third parties.
  2. Whoever is at fault.
  3. Banks and their partner corporations have been developing software for the management of financial transaction far longer than Apple has existed. Software did exist before the iPhone ya' know.
2. Re:its difficult to dispute the position of Apple. by bondsbw · 2016-10-18 06:34 · Score: 2
  
  I can't answer the first two, but
  
  3. what if any qualifications does a banking institution have that define it as a cogent source for software? Apple has been developing quality hardware and software for a generation now.
  Banks have been developing banking software for a long time. Apple has not. That's not to say their software development skills couldn't be transferred successfully, but for the moment I'd place higher trust in banks who understand quite well what the financial implications of poor security are.
  FWIW I think a handful of systems is better than 4000, and is also better than 1 or 2. I like for instance that the US has a few credit card processors; enough to gain the benefits of competition but not so many that it is impossible to support the vast majority of users.
  
  --
  All my liberal friends think I'm a conservative, all my conservative friends think I'm a liberal.
Banks Like Money by TechyImmigrant · 2016-10-18 06:22 · Score: 4, Interesting

>Yet, this infrastructure was built and paid for by Australian banks and merchants for the benefit of all Australians."
Bullshit. The infrastructure was paid for by merchants buying the equipment.
Banks have shown themselves incapable of passing on the reduced costs of electronic transactions to consumers and incapable of deploying secure payment schemes. This particular scuffle is everything to do with banks wanting to keep all the 2-5% transactions fees rather than share it with a phone vendor who has developed moderately secure payment hardware that is in the hands of millions of people.

--
I should use this sig to advertise my book ISBN-13 : 978-1501515132.
Re:shit post by cmiller173 · 2016-10-18 06:32 · Score: 2, Informative

Re-read your post. this quote emphasis mine:
Apple is seeking for itself the exclusive use of Australia's existing NFC terminal infrastructure for the making of integrated mobile payments using iOS devices.
Basically Apple won't let other payment providers create their own apps for mobile payments and wants free use of the infrastructure on IOS devices.
Re:shit post by TechyImmigrant · 2016-10-18 06:37 · Score: 5, Insightful

The NFC terminals were paid for by the merchants. The terminals support several payment schemes.
It is in my interests as a person who pays for things and as a merchant who pays for and uses payment terminals that IPhone based NFC payments remain as secure as possible and letting thousands of different banks mess with it with thousands of different applications is counterproductive.
Look beneath the surface and you will see that this is about grabbing a larger share of the merchant's fee.

--
I should use this sig to advertise my book ISBN-13 : 978-1501515132.
Re:Sounds just like Samsung and ISIS. by SolemnLord · 2016-10-18 06:41 · Score: 3, Funny

I wonder what ever happened to Samsung's ISIS?
I'm guessing an explosion was involved.
Intransigent by grasshoppa · 2016-10-18 06:43 · Score: 2

intransigent
intransjnt,intranzjnt/
adjective
1.
unwilling or refusing to change one's views or to agree about something.
synonyms: uncompromising, inflexible, unbending, unyielding, diehard, unshakable, unwavering, resolute, rigid, unaccommodating, uncooperative, stubborn, obstinate, obdurate, pigheaded, single-minded, iron-willed, stiff-necked
"the regime remained intransigent in its opposition to wider participation in the political process"
noun
...because I had to look it up. :D

--
Mod me down with all of your hatred and your journey towards the dark side will be complete!
Switch to Windows! by somenickname · 2016-10-18 06:43 · Score: 2, Funny

If they are tired of closed systems, they should just switch to Windows. It's "the most open platform there is"! https://tech.slashdot.org/stor...
Re:Banks Hate (lack of) Control by Anonymous Coward · 2016-10-18 06:44 · Score: 2, Informative

Agree. I like this quote:
> This is because Apple Pay is the only application that works with the iPhone's "near field communication" (NFC) antenna, which communicates with payment terminals
If I use NFC for payment related things I don't want another app touching it either. Apple alone does better with security than relying on the bank's developers, the independent app's developers, the terminal manufacturer, and the phone manufacturer (whether Apple or someone else) to all work together. This is why (IMHO) Android has most of its problems--you can't count on each phone manufacturer and the mobile data company to work together to process timely updates even if they just have to reference Google's production code base.
Comment removed by account_deleted · 2016-10-18 06:45 · Score: 2

Comment removed based on user account deletion
Talk about having big Cojones by stevez67 · 2016-10-18 07:01 · Score: 2

It takes a very special kind of vanity for a bank to accuse ANYONE else of being intransigent, closed and controlling. But then, it takes one to know one!
To Australian banks by xenog · 2016-10-18 07:09 · Score: 2

Here I have the world’s smallest violin, and I’m playing it only for you.
Re:shit post by BigBuckHunter · 2016-10-18 07:30 · Score: 2

Look beneath the surface and you will see that this is about grabbing a larger share of the merchant's fee.
Indeed. This appears to be an Australian issue only, because they have only a few banks that collude and fix the prices of transactions. Apple is cutting into their precious monopoly. While I'm in the US and am unlikely to visit Australia anytime soon, it's my opinion that these banks can EABOD.
intransigent, closed and controlling by ilsaloving · 2016-10-18 08:47 · Score: 2

Three of Australia's big four banks have described technology giant Apple as being "intransigent, closed and controlling"

Basically the banks don't like competition to their business model?
Re:Apple is beating banks. by Grand+Facade · 2016-10-18 08:53 · Score: 3, Insightful

Banks charge those fees because they control the industry, it would cost us a lot more if the fee schedule was not proscribed by law.
Now because Apple wants their cut of the action banks are scrambling to protect their gravy train.
The banks want to make sure anything Apple gets is on top of what they charge.
They do not want to pay apple out of their share.

--
Rick B.
..and banks aren't? by epyT-R · 2016-10-18 12:42 · Score: 2

Apple and the banks deserve each other.. Those three adjectives apply to both.