Apple Pay Launches In Australia With Zero Support From National Banks
Just because it works in the United States doesn't mean it'll work everywhere else around the world. That's true about Apple Pay.
In the U.S., Apple Pay was one of the first companies to launch a seamless experience in mobile payments and digital wallet services. Of the three major existing services including Google's Android Pay, Samsung Pay, Apple has the most comprehensive list of partner merchants and banks; but not in Australia.
What practicality and convenience Apple Pay provides to U.S. consumers will be found lacking in the Australian market without any support from the country's national banks. In the U.S., Apple Pay already accepts Visa, Mastercard, American Express, and Discover cards from most major banks. In Australia, American Express is the service's sole banking partner.
With other major credit cards like Visa and MasterCard, individual banks issue the cards and each bank has its own way of verifying a customer's identity when setting up a service like Apple Pay. But Australia's banks are refusing to connect with Apple pay. The reason? Money, of course.
Australia's banks are pushing for a cut of the transaction fee profits. It's much like Taylor Swift threatening to back off Apple Music if Apple doesn't pay up and share more of the profits.
Negotiations are stalling because Australia's banks are contesting the amount Apple wants of the annual $2 billion the banks earn from interchange fees. (Interchange fees are paid by merchants for using the bank's payment infrastructure.) In the U.S., Apple's cut is said to be about 15 cents on every $100 of transactions. That may not seem like much, but it's different in the land down under.
In Australia, interchange fees are about half that in the United States. That would be equivalent to about 50 cents for $100 worth of transactions compared to about $1 for $100 of transactions fees in the U.S. Unfortunately for Apple, executives from Australia's banking sector have said it won't be as easy for Apple in Australia as it was for them in the U.S.