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

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."

Comments

I hope Apple Pay will die

[fred6666]

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.

Re:I hope Apple Pay will die

[bbeagle]

Apple Pay charges merchants 0.15% which is right in line with MasterCard, Visa, American Express and Discover. https://www.cardfellow.com/cre...

Re:I hope Apple Pay will die

[Old97]

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.

Re:I hope Apple Pay will die

[serviscope_minor]

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.

Re:I hope Apple Pay will die

[fred6666]

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?

Re:I hope Apple Pay will die

[SolemnLord]

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.

Re:I hope Apple Pay will die

[vux984]

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.

Re: I hope Apple Pay will die

[BlackSabbath]

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...

Re:I hope Apple Pay will die

[gnasher719]

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.

its difficult to dispute the position of Apple.

[nimbius]

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.

Re:its difficult to dispute the position of Apple.

[cmiller173]

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.

Banks Like Money

[TechyImmigrant]

>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.
 

Re:shit post

[TechyImmigrant]

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.