Apple returns fire on CBA, defends payment service from new regulation
Apple says the federal government’s plan to regulate its payment services is a dangerous overreach and is being driven by the self-interested misrepresentations by major banks about how the iPhones work.
Pushing back against a proposal being considered by the government to extend Reserve Bank powers to digital payment platforms, Apple said the move could backfire by weakening the privacy and security of iPhones.
The government also risked stifling technological innovation and could harm its intellectual property rights, the technology giant argues in submissions to Treasury obtained by The Australian Financial Review.
Apple CEO Tim Cook showing how Apple Pay is being used by the Bank of America. AP
Led by Commonwealth Bank, the country’s largest financial institutions are pushing for the RBA to be given more powers to regulate technology firms that are increasingly pushing into payments. The RBA regulates payments under 25-year-old legislation, and is not allowed to demand data from technology firms, subject them to price regulation like credit card companies, or impose rules relating to smartphones access.
Apple – which charges the banks a fee when users pay through their smartphone – described its digital wallet as being nothing more than “a digital reproduction of a physical wallet, and no more a payment system or participant than an actual physical wallet would be”.
The company said Apple Pay had been specifically designed to be pro-competitive by allowing smaller banks and fintechs more access, and customers the choice of what card they wished to use. It suggested this increase in competition was a key reason banks, led by CBA, are against it.
Apple Pay is used in 75 countries, with 10,000 banks and other card
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