As Apple works to rollout Apple Pay in Australia, it is reportedly facing a number of hurdles, including a reluctance by the major banks in the country to share a piece of the AU$2 billion in interchange fees they take in every year.
Apple could also find it will be difficult to push its touchless payments system as an innovation, as Australia’s financial institutions have offered touchless payments for years, says The Sydney Morning Herald.
“By most global standards, the capability that the Australian banking sector has generally, and Commonwealth Bank has specifically, to provide for customers is ahead of a lot of the other markets around the world where Apple has done well,” Commonwealth Bank of Australia’s CEO Ian Narev said. “There is functionality associated with Apple Pay that we have had in the market for 18 months to two years.”
Likely the larger concern for Australian banks is the cut of interchange fees that would go to Apple. The Cupertino firm is reportedly asking for a piece of the action similar to what it gets in the U.S., thought to be around 15 cents per $100. That fee is collected by Apple from the typical 1% processing revenue collecting by banks in the United States.
Interchange fees in Australia are around half that of the U.S., coming in at around 50 cents on an $AU100 transaction. The Reserve Bank of Australia is pushing for lower fees than that, around 30 cents per AU$100.
The Herald also points out that Apple Pay, with its Apple Watch and iPhone interfaces, present another layer between banks and their customers, while the banks want to leverage this “interface” level as a platform to push other products to its customers.
The publication also asserts that Apple is negotiating from a position of weakness, due to a somewhat questionable report last month by PYMENTS.com that claimed customers were losing interest in Apple Pay. Also mentioned in the Herald report are competing services due to come online, such as Samsung’s “Samsung Pay.”