Banks pay the tech giant a fee for all payments made through Apple Pay, but trade agreements prevent banks from disclosing the amount of those fees or adding a premium to the purchase price. Commercial publication Banking day reported that banks pay Apple between 4 and 6 basis points on debit card transactions, but Apple did not say how much it charges.
Google doesn’t charge a fee for its wallet, but the company may collect transaction data to use to market other services to users. The Australian Banking Association has said data collection like this could raise questions about data privacy and the possibility of customer profiling.
Apple says it doesn’t collect transaction data.
Given Apple’s influence in the market, one of the fears in the industry is that it would be in a strong negotiating position if it looked to raise prices in the future. The RBA didn’t say so explicitly, but pointed to the tech giants’ strong negotiating stance and said new costs could be introduced.
“While technology platforms have the potential to improve the efficiency and security of the payment system by providing new innovative services, they can also introduce new direct and indirect costs,” said the RBA.
Along with concerns about fees, banks and retailers have also protested Apple’s policy of restricting third-party access to the iPhone’s chip that allows tap-and-go payments.
CBA, Westpac and National Australia Bank attempted to launch a collective boycott of Apple on the issue in 2016, but the consumer watchdog rejected their request. Despite this, the RBA noted that it was a growing concern internationally, including an antitrust investigation in Europe.
Apple’s submission stated that Apple Pay had lower fraud rates and was offered to all card issuers on the same terms, and that banks could make their apps “fully integrated” into the payment experience at API help. “FinTechs like Afterpay and Klarna have been faster than traditional legacy banks in adopting these APIs to deliver a superior experience to their customers,” Apple said.
Google’s submission argued that competition could be stimulated by allowing third parties to access near-field communication chips on phones.
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