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  • Apple Reportedly Facing Pushback as it Tries to Roll Out Apple Pay in Australia

    Apple appears to be facing pushback as it tries to roll out Apple Pay in Australia because major backs in the region are hesitant to cede a slice of the AU$2 billion that they make in interchange fees in exchange for technology that some are claiming is already available in the country. CEO of Commonwealth Bank of Australia, Ian Narev, said that Apple will likely find it difficult to market Apple Pay to Australian banks on innovation alone because the country’s financial institutions have offered touchless payment technology for years.

    Narev continued by stating the following:

    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. There is functionality associated with Apple Pay that we have had in the market for 18 months to two years.
    He continued by stating that Apple Pay made a splash in the US because tap-to-pay transactions weren’t previously available. Although his statement isn’t completely true (since Google Wallet launched as a US-only product back in 2011), Apple’s system was in fact one of the first solutions that gained traction in a market where wide acceptance of NFC-based transactions weren’t popular.

    One of the larger concerns for Australian banks though is Apple’s cut of interchange fees. The Cupertino California company is supposedly negotiations a slide comparable to its US operations, which is thought to stand at 15 cents per $100. The publication claims that major banks aren’t keen on interchange fees in Australia being pegged at roughly 50 cents per AU$100 transaction. The Reserve Bank of Australia appears to be pushing for fees at roughly 30 cents for AU$100 instead.

    Furthermore, Apple Pay and its supported interfaces, which consist of the iPhone and Apple Watch, represent an extra layer between banks and their customers at the point of sale. The Australian institutions want to utilize this “interface” level as a platform to sell their products, something which is difficult considering Apple owns the space here. Last but not least, Apple faces an uphill battle in negotiating from position of weakness, stating that Apple Pay adoption is “sagging” in the US just as competing services like Samsung Pay linger in the space as well.

    With all being said and done, it seems like Apple is finally close to being sealed. It’s likely that if and when Apple Pay does launch in this region, the final fee structure is likely to be one that is similar to that of UK banks, which reportedly were able to negotiate lower rates compared to Apple’s US program. Ultimately we’ll have to wait and see though.

    Source: The Sydney Morning Herald
    This article was originally published in forum thread: Apple Reportedly Facing Pushback as it Tries to Roll Out Apple Pay in Australia started by Akshay Masand View original post
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    1. rickuk's Avatar
      rickuk -
      Backs or Banks?