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Australian Banks Challenge Apple's Closed NFC

An application from four banks to the Australian Competition and Consumer Commission (ACCC) requests permission to negotiate only open-access NFC on iOS phones.
By Claire Swedberg

Assuming ACCC approval, Blockley says, "Collective negotiation would be limited to access to the NFC function only. All other items, such as individual deployments, would be one-to-one negotiation."

The bank group stated, in the application, that it will work with Apple to ensure that NFC apps can co-exist on the iPone, and that the user experience in switching between them will be simple and convenient for any user who wishes to install a competitive mobile wallet.

ABI Research's Phil Sealy
Whether the ACCC approves or rejects the application, the decision could set an interesting precedent, says Phil Sealy, a senior analyst at ABI Research. The Apple Pay system, he explains, has been very successful in providing a contactless payment system that is the only NFC-based system enabled on the iOS devices. The challenge from the four Australian banks may be the first legal action, he says, to attempt to break that mold. "If they lose," Sealy states, "I think other people are likely to think that there's no point in trying" to challenge Apple's NFC restrictions in other parts of the world. On the other hand, if the ACCC approves the application, Apple will face pressure to provide an open NFC function on its devices in Australia, which could be of interest to banks and consumers worldwide.

"For me," Sealy says, "it shows that the banks of Australia understand that you have to add value for consumers." That, he adds, would encourage consumers to choose mobile phone-based payments rather than those with a credit or debit card.

The addition of other innovative services, including loyalty and couponing, creates a more powerful payment tool for consumers, Sealy says, while also allowing banks to collect more data via an intuitive new media—a smart device—through which they can connect and communicate with their wallet users. "Making a payment on a smartphone or wearable still has a degree of novelty, but that novelty will wear, and this is when the convergence of payments with other applications will come into play," he states, "creating a level of consumer stickiness in order to maximize the opportunity in the shift from physical to digital wallets."

Apple has made concessions for NFC-based standards in other parts of the world already—for instance, its iPhone 7 and iPhone 7 plus are equipped with Sony FeliCa NFC technology that allows Japanese consumers to make Apple Pay transactions in stores, via apps or online, as well as for transportation payments.

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