Australian Banks ask permission to form anti-Apple cartel

The more things change

There are upsides to having a banking cartel though. New Zealand's big four banks are owned by the Aussie's big four, so we're in the same boat.

While taxpayers the world over were shelling out their hard-earned to bail out their local banks when their profits dipped briefly in 2008, our governments found it too hard to sell the idea to us, (with a straight face), so we didn't have to bail our lot out.

Of course we do have to pay eye-watering fees etc, so it's not all beer and skittles.

"Under normal circumstances, if they formed a cartel-against-Cupertino, the banks would take a battering from the competition regulator, so they've asked permission to negotiate as a group."

Cartels are generally illegal when they are for monopolies.

Other cartels are, when openly formed, like those for hardware standards, or to bid on defense contracts, are legal.

This cartel is fighting to break-up Apple's monopoly. So the competition regulator should be pleased.

This is a trojan horse

The banks are using Apple as an excuse to create a cartel and force all smartphone users to use their payment system. They don't like Apple (or Android, but have less of an excuse to complain about them) sticking their nose into payments, and want to maintain their iron grip.

If Australia allows this cartel, the banks will set the price and terms for mobile payments, and could set security requirements that only they would be capable of meeting, giving them an effective monopoly. Since it would be government sanctioned, it would be pretty much impossible to ever get rid of.

Unless someone thinks the 35-40% of the smartphone market Apple owns in Australia is a "monopoly", they don't have a monopoly and the banks deserve no special consideration from the government. To the extent anyone considers what Apple is doing today a problem, the cure proposed by the banks is definitely worse than the disease!

It's either one large special interest group or another.

You could argue Apple is trojan horsing here. 35-40% is enough to snowball through a certain amount of ubiquity for apple pay, as there already is for itunes.

I don't trust any of them

Contactless or not.

Use the Banks money for credit as it suits you

Pay your bills with cash

Insist on, and keep your receipts

So, banks that aren't ANZ want to screw ANZ

Did I understand that right?

What's preventing the rest rolling out Apple Pay?

If they think Apple's going to change the Apple Pay's architecture that was a key part of the negotiations they've had worldwide with other banks just to please a handful of Australian banks, they're going to be sadly disappointed.

Instead of a "limited boycott"

Why don't they just add an x% surcharge onto all transactions conducted with ApplePay, where x% equals the exact percentage that Apple takes as its cut.

That way, market forces will determine whether Apple has to play ball with the banks, or whether the banks have to suck it up and play by Apple's rules.

what I don't understand is...

"As well as negotiating as a bloc, the banks want permission to conduct a *limited boycott* of Apple's payment system while negotiations continue."

Why do they need permission to decide not to adopt Apple payment? Is someone forcing them to take Apple contactless? If I recall correctly there was a rumour that Apple didn't allow some banks in UK (HSBC) to launch Apple contactless in the first wave (because they'd jumped the gun over Apple with an announcement??). Surely the opposite option is available - i.e. for the Banks to choose not to accept ApplePay.

As Apple mobile phones only represent about 15% of the global market why bother? Surely the banks best option is to declare that they accept contactless payments that use an open standard and leave it to the phone/app suppliers to decide whether they want to be part of that. A small player with 15% of the market doesn't want to join in? Their loss.

Do many people use mobile-contactless? I occasionally used contactless _card_ but don't see the point in increasing the value of my phone to a pickpocket by giving the thief access to my bank account too.

The big banks are protecting their EFTPOS baby

Richard,

One of the Big 4 banks in Australia, ANZ, already supports Apple Pay, and has done for a while. Your article mentions the other three who don't. Can't remember if Adelaide/Bendigo is owned by NAB, Westpac or not, losing track of their slurps.

I suspect the real driver is the proprietary EFTPOS system built, and owned, by the Big 4. As it doesn't use EMV (it's still on magstripes and I'd say similar to Switch in the UK), of course it's AU only and I'd imagine a nice source of direct and indirect revenue. Apple are quite right not to support it.

ANZ going to Apple and Google Pay has annoyed the other Big 3 banks.

I'd say this is about the Big Banks getting all pisssed off at the industry not "recognising" or "thanking" then for being protectionist, profiteering, lazy and a bunch of sour grapes. They took the same behaviour when attacking the business model of the Credit Unions (e.g. locking them out eftpos, or persuading retailers to disallow using the Credit button when paying using a Visa Debit card because it bypasses the eftpos network, increasing per-transaction costs to non-eftpos banks). They also try attacking the smaller Tier 2 banks who customers churn to them for much better service, but it's easier to just buy them out and plunder.

S

its all about the money

It says in the article that the banks want a bigger slice of the transaction charge, the gready f@$ks just after more of your money, for no effort them selves, just watch the money will change hands and it will all go away

Apple is outrageous

Using their App jail to lock out competitors. Totally unscrupulous, and exactly the type of vertical monopolizing that we do not want to see. It would be like the big for banks only accepting their own credit cards at eftpos terminals, forcing a monopoly.

For this one I am in with the banks. And I am surprised that they have not been able to take on Apple directly over this.