Apple fears Australian banks will price it out of the market

Apple fears Australian banks will price it out of the market

Apple has accused some of Australia's largest banks of wanting to price its mobile payment service out of the market and at the same time condition consumers to accept a fee-based model for tap-and-pay transactions for their own mobile wallets.

In its latest submission to the Australian Competition and Consumer Commission, Apple once again raises the spectre of diminished competition in the country's nascent mobile wallet market.

"It may well be that the applicant banks have taken the view that customers may be more willing to pay fees to use Apple Pay," the statement reads, "and on that basis see an opportunity to introduce and condition the market to transaction fees for the use of Apple Pay, with the longer-term view to setting a precedent for charging for mobile payments on other digital wallets, in the future, including the banks' own proprietary wallets."

It is the latest salvo in a bitter dispute between Apple and five of the country's biggest banks - Commonwealth Bank of Australia, Westpac Banking Corporation, National Australia Bank, and Bendigo and Adelaide Bank - who were seeking permission from the competition watchdog to engage in collective negotiation and boycott activities with Apple in relation to the roll out of Apple Pay in Australia.

In December, the Commission issued its provisional ruling, coming down in support of Apple and expressing concerns that a ruling in favour of the banks could reduce or distort competition in a number of markets.

The banking consortium controls 70% of the Australian card market, giving the banks "the means, motive and opportunity to disadvantage Apple Pay by pricing Apple Pay transactions above transactions made using their own proprietary issuer digitial wallets to dissuade cardholders from using Apple Pay," states Apple, adding: "Any rational economic player would be expected to take advantage off that opportunity."

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