Tyro’s executive director, Jost Stollmann, has come out swinging on behalf of the banking "oligopoly” that Apple has accused - in its latest submission to the Australian Competition and Consumer Commission (ACCC) - of trying to leverage its Apple Pay platform to reap revenue in a digital age.
A clique of Australia’s leading banks are seeking the right to collectively bargain for access to Apple’s NFC chip, but the iPhone maker has argued the banks merely want to avoid transaction fees associated with Apple Pay and redesign revenue streams for themselves.
“Apple has been puzzled by the applicant banks’ logically inconsistent argument that they wish to have the ability to charge consumers per transaction fees for using Apple Pay, but are unlikely to be able to do so owing to competition from other issuers like ANZ who do not,” Apple said in its latest submission published by the ACCC this week.
In response, Stollmann said Tyro supported the position of the Group Participants - Bendigo and Adelaide Bank, the Commonwealth Bank of Australia, National Australia Bank and the Westpac Group – who asked the ACCC in July last year to allow them to negotiate collectively with Apple over its mobile wallet.
Among the major four banks, only ANZ currently offers Apple Pay.
In a key November draft decision, the ACCC indicated it would deny the banks' joint application, suggesting its benefits were "uncertain".
However, the ACCC has left sufficient wriggle room for Stollmann to argue in Tyro’s submission that there should be equal bargaining powers between mobile payment providers in Australia and that - at least - more time was needed.
“Because, as we have seen in recent years, disruptive technologies create pathways for better innovation and potential collaboration,“ he noted.
Tyro said that to give the “local bank oligopoly” a collective bargaining/boycotting capability “over a meaningful time horizon is the only way to bolster the currently faible(sic) negotiation position of the Australian banks".
“Open standards are in the public interest,” Stollmann wrote. “That is why the major Australian retail banks should themselves embrace a culture of allowing innovation and competition and commit to Open Banking standards.”
Apple meanwhile said in its submission that it welcomed the ACCC’s draft determination – edging toward denying authorisation for the banks to jointly negotiate with Apple over the terms of access to the Apple Pay platform.
“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 because of the ease and security of using Apple Pay 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,” the tech giant suggested.
“If the applicant banks are granted authorisation to continue to block or delay the expansion of Apple Pay to greater numbers of cardholders in Australia, this will have a significant impact on smaller card issuers who already, or could in the future, rely upon Apple Pay as a means of securing a digital presence in competition with the big banks."
According to Tyro, transaction fees are common in the payments industry: “We do not believe that allowing pass through fees would greatly disadvantage Apple Pay’s position amongst consumers," said Stollmann.
Equating pass through fees to surcharges in credit and debit card payments, Tyro suggests this would in fact, “send appropriate price signals to the user".
“The objective of the Group Participants to pass through Apple Pay fees to consumers is not to undermine the status of Apple Pay, but to open up the playing field so that digital wallets from other financial providers can compete on an equal footing," he added.
An ACCC spokesperson told AB+F a response from the banks to the ACCC's draft determination is expected to be published later this week.