Is Australia Trying to Block Apple Pay?

iphone apple payFour of Australias largest banks may be trying to prevent Apples mobile payments solution from coming to the country in order to maintain their share of the nations payments market.

According to the Australian Financial Review, the banks are unwilling to give Apple a share of the $2bn AUD (£946m) they earn annually in interchange fees, which are paid by merchants for the use of their payments infrastructure.

In the US, Apple reportedly earns around 15 cents on every $100 (£64) of transactions, and is seeking similar interchange fees in Australia. However, the banks in question are refusing to agree to this as standard fees in Australia are almost half what they are in the US.

UK banks faced a similar challenge when Apple Pays launch was being negotiated, and managed to bring Apple down to interchange fees of only a few pence for every £100.

Ian Narev, CEO of the Commonwealth Bank of Australia, has said that Apple Pay may have a harder time launching in down under due to Australian banks existing innovations in payments.

“By most global standards, the capability that the Australian banking sector has generally, and Commonwealth Bank has specifically, to provide for customers is ahead of a lot of the other markets around the world where Apple has done well,” said Narev. “There is functionality associated with Apple Pay that we have had in the market for 18 months to two years.”

National Australian Bank and Westpac are also reluctant to deal with Apple and have existing apps for Android users that enable contactless payments, while Reserve Bank of Australia is aiming to push interchange fees down even lower for all transactions, making it unlikely to favour Apples entry into the market.

If such resistance continues, its possible that Apple will launch with a smaller bank in an effort to attract iPhone users away from the major players, and in turn encourage them to make a deal. However, such a move would result in a smaller launch for Apple Pay in Australia than the company generally likes to make.