Apple under fire from banks, regulators over payment app restrictions


But the ACCC appears to be taking a tougher line against Apple, following its investigation into the digital platform, which has raised concerns about Apple and Google’s market power over apps. The ACCC, which will appear before the PJC next week, told the committee in a brief that “with rapid technological change and evolving markets, ensuring effective competition becomes all the more important.”

If banks cannot use the features of the iPhone to create their own tap-and-go payment applications, “it could limit the competitive constraint of existing and potential competing applications due to these product limitations,” added ACCC.

The Australian Banking Association told the committee that it was “worthwhile to impose greater transparency and greater oversight of the conditions of access to mobile devices”.

The Reserve Bank said that while technology platforms “have the potential to improve the efficiency and security of the payment system by providing new innovative services, they can also introduce new direct and indirect costs” and ” As digital wallets are increasingly used, wallet providers could gain substantial market power, which could have implications for competition and the efficiency of the payments system.

However, the RBA said it “sees no case for regulatory action at this time.”

Google and Apple have taken different approaches to accessing payments. Google has opened up access to third-party application developers to the NFC chip on Android phones, while Apple’s NFC architecture is shut down. Apple says this is necessary for security reasons.

Apple, which is not on the list to appear before the committee next week, told it in a submission that it does not “restrict” or “limit” banks from making NFC payments with their mobile banking apps and allows banks to initiate NFC payments directly from their iOS. applications. However, he warned that “giving control over NFC capabilities to individual banks would compromise the customer experience on Apple devices, reduce security and privacy, undermine choice and hurt competition.”

Commonwealth Bank CEO Matt Comyn will appear before the committee on Tuesday, following the appearance on Monday by RBA Payments Officer Tony Richards. The ABC said in its submission that the mobile phone must “operate on a basis of competitive neutrality”.

“Regulation should prevent the development of monopolies or market domination by a small number of players and ensure interoperability between mobile wallet ecosystems so that consumers can benefit from greater choice and greater innovation, ”the CBA said.

Banks have been concerned for several years that tech companies are gaining customer relationships by delivering smoother digital experiences; Last week, it was reported that Apple is working with Goldman Sachs in the United States to develop more credit products.

National Debit System Eftpos is also concerned about the way cards are funded in digital wallets. When debit cards are loaded into smartphones, they default to networks operated by the international Visa and Mastercard card systems, rather than Eftpos. On Google Pay, eftpos is not available on multi-network debit cards at all. Eftpos told the committee he would support the regulation “to ensure a level playing field”.

Apple told the committee that it does not provide financial or payment services and that its “only role has been to develop the technical architecture that can be used by authorized financial institutions to provide their consumers with a more secure and secure way. more secure to pay with their credit, debit or prepaid cards ”. Apple has warned that “policies or regulations that seek to prescribe or dictate a technical approach are unnecessary and create serious unintended consequences, including compromising the security of payment systems and stifling innovation.”

Banks also told the joint committee that the standards that underpin the digital economy need to be aligned and payment policy coordination needs to be improved. Banks are concerned about inconsistencies between the review of privacy law, proposed digital identity and consumer data law legislation, and the PJC’s interest in payments comes as the Treasury and Reserve Bank conduct their own reviews of the payment system while ASIC reviews the ePayments Code.

The banks separately argued that tech giants should not be able to access bank customer data through CDR without having to provide their own data in return. Banks are also warning that the entry of tech giants into payments could reduce incentives for banks to invest in payment infrastructure.

Meanwhile, the ACCC said this week it had delayed by six weeks until mid-September a decision on the merger of the three national payment systems – which the banks say is needed to create a scale to compete. with the giants of technology and cards.


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