In Australia, banks disrupt Apple with mobile payments power
By Staff Writer
It's a challenging task for Apple Inc for strengthening mobile payment system in Australia. The American technology giant finds it difficult to rope in Australian banks to sign up for its mobile payment system. Apple Inc is yet to arrive any conclusion on an agreement with Australian banks.
In November, Apple Inc introduced its mobile payment system in Australia. Apple's mobile payment service with support for payment cards issued by American Express Co. Apple Inc is transforming its mobile consumer electronics prowess into financial services.
According to a report by Reuters, Apple Inc is in the process of expanding its mobile payment services globally. Towards this, it rolled out mobile payment service in Australia last month and very soon in China. ANZ, National Australia Bank (NAB), Commonwealth Bank and Westpac are in the list of Apple Inc for forging an alliance on launching mobile payment service.
Contactless payments systems generally use credit cards, debit cards or smart cards. Banking customers can also use smart phones with radio-frequency identification (RFID) or near-field communication (NFC) for making secure payments. Contactless payment services are gaining popularity in Australia since they were introduced in 2010.
According to a report by Bidness, Australian banks have their own payments app for providing similar mobile payment services. The bank cards issued by Australian banks can also be used for contactless payments. Unless a formal partnership with Australian banks, Apple Inc can't explore the 80 percent of banking consumers.
The five major banks account for about 80 percent of consumers. A majority of credit card holders are using mobile payments systems linked to other credit cards. The transactions on these credit cards, as per Westpac's data, are estimated to be $2 billion in 2015.
Some analysts, as CBL Radio reports, some Australian banks are under the impression that they have done entire groundwork for contactless payment system in the country and now, Apple Inc is entering to just to eat their lunch.
Australian banks have developed their own technology and mobile payment platform to support contactless payment system.
Foad Fadaghi, Managing Director, Telsyte, a technology research firm, said: "The banks here feel like they've done the hard work in bringing contactless payments already to Australia and Apple is just going to come in and eat their lunch."
Apple Inc had also faced some hurdles in launching mobile payment services in US also. The contactless payments were new at that time. Apple Inc too faced resistance from major banks in Britain also.
Banking analysts opine that Australian banks and customers are familiar with contactless payments system.
Some analysts feel that Apple didn't understand the Australian market well. Another electronics major Samsung is also expanding its mobile payment system 'Samsung Pay' in Australia.