Apple Reportedly Struggling to Win-Over Australian Banks with Apple Pay

by Tristan Hugo-Webb 0

Last month, Apple announced that it was launching Apple Pay in a number of new markets around the world including Australia through a deal with American Express. However according to reports from Australia, Apple is struggling to convince Australian banks to sign up for the mobile payment service over the cut Apple will receive in transaction fee revenue and enable Visa and MasterCard cardholders to participate.

To date, Apple has yet to strike a deal with any of the four main banks (ANZ, National Australia Bank (NAB), Commonwealth Bank and Westpac), meaning that about 80% of the consumer base cannot use Apple Pay. Commenting on the reports, Foad Fadaghi, managing director of technology research firm Telsyte said,

“The banks here feel like they’ve done the hard work in bringing contactless payments already to Australia and Apple is just going to come in…and eat their lunch.”

The reports from Australia are not new, the same was said in the UK and reports suggest Chinese banks have also pushed back on Apple regarding transaction fees. The Australian case study might be most similar to the UK where contactless card use is rapidly growing and strengthening the bargaining position of the banks. While Apple did eventually agree with most banks in the UK and will do so in Australia, it does show that Apple does not have the same power that it does in the United States.

Overview by Tristan Hugo-Webb, Associate Director, Global Payments Advisory Service at Mercator Advisory Group

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