In a move to challenge tech giants’ growing dominance in digital payments, one of Australia’s financial institutions has called on the government to intervene and secure more equitable access to Apple‘s (NASDAQ:AAPL) iPhone hardware. The Commonwealth Bank of Australia (CBA) is advocating for regulatory oversight to ensure that rivals can utilize the iPhone’s near-field communication (NFC) technology on reasonable terms, potentially reshaping the competitive landscape for mobile wallets Down Under.
Apple Pay first arrived in Australia back in 2015, initially partnering exclusively with American Express before gradually expanding to include all major banks by early 2020.
This service quickly gained traction, becoming the go-to contactless payment option for many users.
By that time, it accounted for about 6.5% of Australians’ contactless transactions, even as overall adoption hovered around 10.8%. The appeal lay in its seamless integration and user-friendly interface, which outshone some bank-issued alternatives.
However, this success came at a cost to banks: Apple imposed fees estimated at 4 to 6 cents per $100 transaction, depending on the card type.
As first reported by Apple Insider, these charges, while small individually, added up significantly for financial institutions processing high volumes.
The tide began to turn in 2024 when Apple, under pressure from European Union regulators, agreed to open up NFC access to third-party developers.
This change extended to markets like Australia and the United States, allowing banks and other providers to create their own payment apps that tap into the iPhone’s hardware directly.
Previously, NFC was locked down, limiting competition and funneling users toward Apple Pay.
CBA had been a vocal proponent of this shift for years, viewing it as essential for fostering innovation and choice in digital payments.
Despite this progress, CBA remains unsatisfied with the current arrangement.
In a submission to a parliamentary inquiry, the bank highlighted that third parties must still seek Apple’s approval to use NFC and pay undisclosed fees for the privilege.
Speculation suggests these costs could mirror Apple Pay’s rates, potentially discouraging banks from developing alternatives and maintaining Apple’s advantageous position.
CBA is urging the Reserve Bank of Australia (RBA) to leverage its newly granted powers over digital wallets to mandate “reasonable” terms.
This, they argue, would prevent excessive pricing that erodes banks’ margins and stifles true competition.
The push comes amid a broader House of Representatives economics committee investigation into the fairness and accessibility of Australia’s payment systems.
Focused on big tech’s role in banking, the probe examines how platforms like Apple influence consumer options and market dynamics.
A public hearing is slated for late February, where Apple executives are anticipated to appear, offering a platform for direct scrutiny.
While Apple has not publicly responded to CBA’s latest claims, the company has historically defended its ecosystem, emphasizing security and user privacy as justifications for controlled access.
The implications of this dispute extend far beyond fees.
If successful, CBA’s campaign could empower banks to roll out customized payment solutions, potentially lowering costs for consumers and enhancing features tailored to local needs.
Greater NFC openness might also spur innovation, such as integrated loyalty programs or faster transaction speeds, benefiting everyday users.
However, without intervention, critics warn that Apple‘s terms could perpetuate a quasi-monopoly, where convenience comes at the expense of competitive pricing.
As Australia grapples with balancing tech innovation and regulatory fairness, this inquiry could set precedents for how governments worldwide address big tech’s gatekeeping in finance.
With digital payments integral to everyday activities, ensuring equitable access isn’t just about banks’ bottom lines—it’s about providing consumers with genuine choices in an increasingly cashless economy.