The Sydney Morning Herald disclosed that the company is negotiating with at least four of the biggest banks there for a partnership for Apple Pay.
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It ran into multiple problems on the London Tube after its UK introduction, while take up in the U.S. seems to be a little slow, and now the company is reportedly in a stand-off with the major Australian banks.
The issue is that the US banks generally make about $1 of profit for every $100 spent, so sharing 15 cents isn’t that big a deal.
Another part of the Australians’ argument is that their country already has similar platforms available, and that that has been the case for years.
Unlike in the US, where at its launch Apple Pay was innovative and new, Australian banks like the Commonwealth Bank of Australia (CBA) have offered contactless payments (to Android users) for two years.
Second, the negotiations are also challenged because banks are concerned about the prospect of Apple getting in between them and their customer at the point of sale, as banks recognise that future revenue growth will come from being the “interface” when customers pay for goods and services, which will allow them to cross-sell products.
Almost ten months after Apple Pay launched in the United States, an increasing number of retailers including Rite Aid and Best Buy have reversed course and announced support for the mobile payments service.
Narev was certainly not putting all bets on Apple in the mobile payments race.
Despite CBA’s opposition, Narev believes that sooner or later large multinational companies will have an effect on the country’s financial services industry: ‘If not Apple, it might be Goole: if it’s not Google it might be Samsung: if it’s not Samsung it might be Amazon [or its] going to be someone else’. No. But the disruption is structural. And I don’t think there will ever be a point where me or my successor, or his or her successor, is ever going to sit here and say their war is done and we won. Customers can use their phones at tap-and-go terminals if they’ve got the banks’ apps set up.
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Firstly, the Reserve Bank of Australia is forcing banks to contribute to the cost of building a real-time payments infrastructure and the banks reportedly don’t want Apple to take advantage of this investment without contributing to the project.
