For the first time globally, a group of financial institutions have banded together to seek permission from a competition regulator to intercept Apple.
A number of Australia’s largest banks including The Commonwealth Bank of Australia, National Australia Bank, Westpac Banking Corp and Bendigo and Adelaide Bank, have requested permission from The Australian Competition and Consumer Commission (ACCC) to negotiate with the technology giant to get their own digital wallets onto iPhones.
Fuelled by the fear of missing out on interchange fees as more people begin to pay by tapping their iPhone instead of their bank card, three of the big four and others hope to use their collective power to force Apple into submission.
Whilst all of the major banks have applications available for iPhone users to make transactions via internet banking, Apple has a lock-down on its devices which only allows Apple Pay access to an iPhone’s NFC (near field communications) antenna.
As a result, the banks are unable to facilitate contactless payments on terminals and also fear that their customers with iPhones will not receive new payment and digital wallet offerings.
The ACCC said on Wednesday the banks seek authorisation "on behalf of themselves and potentially other credit and debit card issuers to engage in limited collective negotiation with providers of third-party mobile wallet services on conditions relating to competition, best practice standards, and efficiency and transparency".
At this stage, it is unclear whether Apple will make the decision to negotiate with the banks.
CBA developed its own solution, released in December 2013, allowing customers who use iPhones to attach a sticker on the device which acts as an antenna. However, the solution has not been widely adopted by customers.
Telsyte principal analyst and managing director, Foad Fadaghi, told ARN that consumers would be the biggest losers from the impending challenge.
“There is only one of the big four banks [ANZ] which has the ability to use Apple Pay,” he said.
“There are more individual Apple users users than there are customers of any individual bank so Apple is a larger company in that respect.
“From a user point of view it is a shame that it will get tied up in litigation and a protracted legal scenario, it should be something they can figure out behind closed doors.
He said that the challenge was more a result of the strength of the Australian banks which has meant they are audacious enough to challenge Apple on the issue.
Chris Player contributed to this article