“Australia’s largest banks are fending off the world’s largest technology company, Apple, as it tries to muscle in on the hotly contested payments market,” James Eyers reports for The Sydney Morning Herald.
“Fairfax Media understands fees are a big sticking point in the negotiations, with big banks not willing to give Apple a slice of the $2 billion a year they earn in interchange fees, which are paid by merchants for use of payments infrastructure,” Eyers reports. “In the United States, Apple is believed to earn about 15¢ on every $100 of transactions. It is understood Apple has been asking for the same amount of interchange fee in Australia.”
“But Australia’s big banks will not agree to this level given that interchange fees in Australia are about half the US level – equivalent to an average of 50¢ $100 of transaction compared with about $1 for $100 of transaction fees in the US… Commonwealth Bank of Australia chief executive Ian Narev said CBA had already offered the same functionality as Apple Pay through its app – for users of Android phones – for two years, so it was difficult for Apple to argue it is providing much value,” Eyers reports. “Apple is also negotiating from a position of weakness given that the take-up of Apple Pay in the US appears to be sagging. It is also facing competition from Samsung, which announced last week it would launch Samsung Pay in the US on September 28.”
Read more in the full article here.
MacDailyNews Take: Another test for Eddy Cue.
The smart bank(s) will realize that iPhone users are the ones who actually have disposable income and the proven will to spend it, not to mention open bank accounts in which to store and manage it.