Apple steps up battle with Australian banks over Apple Pay boycott motive

“Apple Inc. has stepped up its battle with Australia’s banking industry over the future of mobile payments, accusing an industry consortium of attempting to ‘delay or even block’ the expansion of Apple Pay into the country,” Emily Cadman reports for Bloomberg. “In its latest submission to the Australian Competition & Consumer Commission, published Monday, Apple said it was concerned banks are seeking to ‘delay the expansion of Apple Pay,’ hurting both consumers and smaller card issuers who could use the technology ‘as a means of securing a digital presence in competition with the big banks.'”

“It is the latest salvo from the U.S technology giant in a dispute about whether the country’s leading banks should be permitted to negotiate as a bloc over the introduction of Apple Pay,” Cadman reports. “The banks, which have invested in their own mobile technology in recent years, fear being shut out of the fast-growing market and want to negotiate as a group to boost their bargaining power.”

“The dispute centers around access to the iPhone’s near-field communications antenna, the technology that makes payments on contactless readers possible,” Cadman reports. “Apple wants banks to allow customers to upload their credit cards to its proprietary digital wallet, whereas the banks want their apps to be given direct access to the technology.”

Read more in the full article here.

MacDailyNews Take: Banks should not have direct access to iPhone’s NFC chip. Protecting iOS users’ security is of paramount importance.

SEE ALSO:
ACCC proposes to deny authorisation for banks to collectively bargain with and boycott Apple on Apple Pay – November 29, 2016
Australian banks dismiss Android NFC past in Apple Pay negotiations – November 14, 2016
Australian banks accuse Apple of anti-competitive behavior, want access to iPhone’s NFC chip to take on Apple Pay – July 28, 2016
ANZ welcomes Apple Pay in Australia with a funny new TV ad – May 5, 2016
Apple expands Apple Pay in Australia with ANZ bank deal – April 28, 2016
Aussie consumers lose as banks effectively boycott Apple Pay – November 27, 2015

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

16 Comments

  1. Nobody outside of Apple should be allowed access to the inner workings of iPhones. There is no other way that Apple could properly protect the security of their phones otherwise.

    The banks are trying to claim that they wish to encourage competition, but that’s clearly a lie because they are actually trying to stop competition from Apple so that they can keep access to their customer’s data and retain the access fees that they currently charge.

    1. This isn’t about accessing Apple’s secure enclave. It’s simply about having an API that other apps can use.

      Apple SHOULD open the NFC chip up with APIs, unless it can show that there’s a security risk in doing so… which so far isn’t what it’s doing.

      NFC access would allow not just banks to create near-field apps, but also transit systems and other creative uses. They had no problem adding FeLiCa support for the Japanese market.

      1. Nonsense. Why should the onus be on Apple to predict the multiple ways that a third party could screw up Apple’s security systems?

        It was only last week that we were reading about how hackers had obtained Celebrites files detailing how they had been trying to attack iPhones.

        So long as Apple keeps security information and technology to itself, it can properly safeguard it. If Apple ever allowed third parties to get involved, Apple no longer has control of what might happen. It’s an absolute position and one that Apple would be insane to back off from.

        Apple has already provided means for other banks to access Apple Pay and it’s working very well for them. If the Australian banks refuse to get on board too, then that’s their decision, but they’re never going o be allowed to compromise Apple’s security, especially when their reason for wanting to do so is so blatantly to protect their profits.

        Apple Pay handling charges are remarkably low and most other banks reckon it’s pretty good value, especially with Apple taking responsibility for the security of those transactions too.

        1. ME Here has a valid point.

          Right now, ApplePay has a very limited utility, and it is essentially to be a broker between banks and merchants.

          The NFC chip, coupled with the secure enclave, has enormous potential to replace the myriad of secure access methods we use every day.

          On my keychain, I have a keyfob for access to my apartment building (NFC); I have CitiBike keyfob for the bike sharing service in NYC (also NFC); I have two NFC security ID cards, one for my office, one for my kids’ school; I also have a magnetic stripe MetroCard for accessing the NYC transit system (subways and buses). And I’m sure I’m still missing a few that I can’t remember of the top of my head right now.

          All of these could easily be eliminated if various third-party vendors were allowed to authenticate using the NFC/secure enclave service on the iPhone.

          1. I don’t know if it’s technically possible for an iPhone to read another NFC card, but if it were, then it should be possible for Apple to devise a way to replicate existing NFC cards with the approval of the card provider.

            The way that I see it is that you would touch the card to your iPhone to clone it and then Apple would establish with the card provider that you are authorised to use that card. After that, you would be able to use Apple Pay instead of that card.

            The huge advantage would be that this would be done without multiple companies tinkering with the security measures of iPhones. It would just be a matter of checking with them when a request has been made to replicate an existing card.

            Apple Pay has been accepted on London underground trains since the summer of 2015 as an alternative to London Transport’s own NFC system. If they can do it, why can’t NYC? It’s been very popular with visitors as they don’t need to pre-pay or top up a physical card. They simply walk straight up and use Apple Pay. London Transport keep track of how many journeys you make in that day and charge you for the cheapest rate for those journeys combined. You might start off making what you thought was going to be one journey, but later make another, so the fare gets reduced to that of a one day inclusive ticket and all subsequent journeys are free for that day.

            1. I’m not sure if the NFC cloning would work that easily; after all, that communication is encrypted, and the purpose of that encryption i precisely to prevent cloning. I can’t imagine how that would be set up without compromising security.

              Even if cloning is out of the question, the utility of the NFC/secure enclave could be widely expanded if Apple did allow some limited API to access it for authentication.

              I am truly impressed that London Transport had figured out how to leverage ApplePay, and I’m in fact curious about that. As it is, ApplePay allows only banks (financial institutions) to authenticate through it. While it is fairly straightforward to set up a service that can use Wallet/Passbook (boarding passes, event tickets, loyalty programmes, etc), none of these require TouchID authentication. Perhaps London Transport set it up as a financial institution, authenticating a financial transaction. In a way, pretending to be a bank, letting user “pay” for the service (the tube) with his/her “credit account” with London Transport. In a way, a work-around.

  2. I understand why people use it elsewhere, but Australia has had contactless payment chip cards for ages. It’s much less fiddly to wave an Amex card at a terminal than to open Apple Pay on the iPhone and do the same. I tried Apple Pay a few times. It’s still on my phone but I never use it. I’m going to delete it – I keep opening it by mistake when I’m trying to unlock the phone. Irritating.

    The banks control the credit cards and debit cards. Only Amex is independent in Australia. Maybe Diners Club but no-one accepts it except big hotels and some tourist places.

    If Apple Pay was more compelling the banks would have agreed a deal already. Apple might get there but I don’t think it really offers much in the Aussie environment.

    1. Couldn’t disagree more. Take phone which is already in hand (or at worse in pocket) and with finger on home button hold near terminal. No opening Apple Pay is required. Take watch which is even more ‘handy’and double tap button side and hold near terminal. Whilst I have Westpac as my primary bank all my payments go through my ANZ account now and I transfer funds to it once a month to balance the books. Westpac loses all the fees it would have received. The ‘big bank’ monopoly are suckers.

      1. Exactly right. My iPhone is in my jacket (or pants) pocket. When I reach for it, my thumb is already naturally positioned to authenticate. There is really nothing to do here. As soon as you put the phone near the terminal, ApplePay wallet/passbook app automatically pops up over the lock screen and prompts for the TouchID authentication. And it takes literally one second to authenticate.

        With a credit card, I have to reach for my wallet (usually also in either back pocket, or inside jacket pocket). Then I have to drop what I’m holding in my other hand in order to pull the credit cart out of the wallet (although, with some finger gymnastics, I have devised a way to open the wallet and pull a card with one hand; it does take a while, though…). Once I pick out the right card, I tap/swipe/insert, wait for the terminal to authenticate, then put the card back in the wallet, then put the wallet back in the pocket, then bend down and pick up the stuf I had to drop on the floor.

        I am not saying this is a colossal difference and time-saver, but the process is very clearly more convenient and faster than the wallet/card.

        I have had ApplePay for over a year now (since 6S came out). I don’t think I have ever opened it by mistake when trying to unlock my phone. I’m not sure what you’re doing to make it happen, but it never happened to me.

  3. “Apple said it was concerned banks are seeking to ‘delay the expansion of Apple Pay,’ hurting both consumers and smaller card issuers who could use the technology ‘as a means of securing a digital presence in competition with the big banks.”

    Wouldn’t the other legal party counter that argument by saying Samsung Pay is available on iOS devices in addition to Android so small card issuers could simply use that instead of ApplePay? So due to an alternative existing they are not ‘harmed’ in the way Apple claims in competition with larger banks?

    1. I suppose it’s to show Apple that if the group wants the same thing of Apple so negotiating collectively has more pull than each of them doing the exact same thing. Sort of how unions are supposed to work.

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