Aussie banks don’t want to share their profits with Apple Pay

That fee may very well be what is slowing the growth of Apple Pay in the U.S., as well as in other countries. Major banks and financial institutions in other countries are fighting the rollout. In Australia, banks only make about 50c per $100, so giving up 30 per cent of their profit to Apple is a sticking point. “There is functionality associated with Apple Pay that we have had in the market for 18 months to two years”. According to a report published by Reuters, Apple will initiate meetings with investors from tomorrow with regards to its debut in the Australian Bond market. The six banks in talks with Apple are believe to be the Royal Bank of Canada, TD Canada Trust, Scotiabank, Bank of Montreal, CIBC, and National Bank of Canada.

Certainly, Australia’s use of tap-and-go credit and debit cards, which allow customers to pay by holding their card over a contactless reader, are well in advance of what’s on offer in the U.S. Some banks already have their own version of Apple Pay – the Commonwealth Bank and Westpac, for example, offer a “Tap & Pay” functionality through their apps on Android and Samsung smartphones, respectively. If Cupertino wants to continue increasing the number of participating banks in Apple Pay, it might want to reconsider how much of the interchange fee it is asking for. First, because they are being forced by the RBA to tip hundreds of millions of dollars into building the New Payments Platform, new infrastructure that will have real-time capability, there are concerns about Apple seeking to free ride on this investment. Beyond Australia, Apple is planning to launch Apple Pay in Canada in November, according to The Wall Street Journal.

Narev recognised payments is a space which is being disrupted by tech and the saturation of mobile. “If it is not Apple, it might be Google; if it is not Google, it might be Samsung; if it is not Samsung, it might be Amazon; if it is not Amazon, it is going to be someone else”, he added. No. But the disruption is structural. And I don’t think there will ever be a point where me or my successor, or his or her successor, is ever going to sit here and say their war is done and we won.

“But we have got customers, we have got distribution, we have got brand, we have got product”.

It is worth nothing, however, that lower fees than what are charged in the U.S. might well be on the table – as at the time of its United Kingdom launch, it was noted that United Kingdom banks aren’t forking over the same fee cut as their American counterparts.