Four Australian banks have failed to secure permission from the competition regulator to collectively bargain with Apple to allow iPhone users to make mobile payments from their' own digital wallets, rather than Apple Pay.
The Commonwealth Bank of Australia, Westpac, National Australia Bank and Bendigo and Adelaide Bank said they were disappointed by the Australian Competition and Consumer Commission's final ruling, and will individually review their future strategy for mobile wallets and payments.
In a joint statement on Friday, the banks said they had invested "significantly" in their respective mobile offerings, and would continue competing against each other and offer innovations for consumers on mobile.
ANZ is the only major Australian bank to sign up with Apple, which restricts contactless payments on Apple devices to its own Apple Pay platform.
Lance Blockley, a payments specialist and spokesman for the four banks, said the case was about consumer choice.
"The applicants made this application to seek to ensure they could participate in the future of mobile wallets, and not have the course of development for mobile wallets in Australia dictated by a single overseas corporation," Mr Blockley said.
The banks had garnered "strong support" from several major Australian retailers and other financial institutions, he said.
ACCC chairman Rod Sims said the watchdog was concerned the proposed move would likely "reduce or distort competition" in several markets.
"While the ACCC accepts that the opportunity for the banks to collectively negotiate and boycott would place them in a better bargaining position with Apple, the benefits would be outweighed by detriments," he said.
Foad Fadaghi, principal analyst at research firm Telsyte, wasn't surprised by the ACCC's decision, citing security concerns by Apple and consumers.
"There are always challenges in getting people to utilise a new payment system, and security is often one of the main considerations that consumers have before they engage with things like mobile payments," he said.
The ACCC said it had consulted with consumers, financial institutions, retailers and technology companies in reaching its final decision, which is in line with its draft ruling on November 29.
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