Apple’s legal tension with Australian banks over Apple Pay restrictions remains taught, but a new development in the application may clarify some of the thornier issues involved.

The banks involved have narrowed their original request for access to both Apple Pay and the Near Field Communication (NFC) functions of an iPhone to just the NFC section. With this access, the banks hope to create a more egalitarian mobile wallet situation in the Australian marketplace.

“The applicants are ready, willing, and able to participate in Apple Pay, alongside being able to offer their customers their own mobile wallet products,” said Lance Blockley, payments specialist and spokesperson on behalf of the applicants.

“This application has always been about consumer choice, and allowing competition between the makers of mobile wallets to offer the best products and features they can to determine which mobile wallet consumers will use,” he said. “The applicants want to put up their digital offerings head to head with Apple Pay, and let the market and individual consumers decide which best suits their needs.”

Legal appeal
Last July, four Australian banks, Bendigo and Adelaide Bank, Commonwealth Bank of Australia, National Australia Bank, and Westpac, applied to the Australian Competition and Consumer Commission for access to the Apple’s Apple Pay system as well as access to the NFC capabilities of the iPhone – the technology that allows for in-store mobile payments.

The banks argued that withholding access to these features and restricting them only to Apple creates an anti-competitive atmosphere and essentially locks out any other competitors from entering the mobile payment arena.

The request met resistance from Apple and little progress has been made since then.

Those four banks are now submitting a new request, narrowing the application to require Apple to only disclose access to the NFC capabilities of the iPhone to the banks and therefore their customers.

The banks argued that with the massive popularity of the iPhone, any competitor who wanted to create its own mobile wallet system would have to go through the iPhone.

Without access to its NFC functions this became next to impossible.

Now, the banks are hoping that by narrowing their request, they are more likely to meet with success and push past Apple’s bullish defense of its functions.

“Open access to the NFC function, as occurs on the world’s most popular and widely installed mobile operating system Android, is important not just to the applicants and mobile payments, but to a range of NFC-powered functions across many sectors and uses,” Mr. Blockley said. “This has global implications for the use of NFC on smart phones.”

NFC stranglehold
With access to the NFC functions of the iPhone, Australian banks and retailers would be free to create their own competitive NFC mobile payment systems that would be compatible with one of the most popular smartphones in the world.

The banks would serve to benefit, but the idea of the request is that consumers would be the ones who benefit the most in a more competitive atmosphere.

Legal issues will always have a profound effect on the brands, retailers and consumers that it is concerned with and these Australian banks know it.

Compare this application with some of the issues facing American banks and brands, such as the appointment of a new FCC chairman hostile to the idea of net neutrality (see story).

These kinds of issues have winners and losers, but ultimately what is at stake and what must be protected is consumer independence.

“The application seeks permission to jointly negotiate with Apple; this is not an attempt to delay Apple Pay from entering the Australian market,” Mr. Blockley said. “The applicants expect that Apple Pay would be offered to their customers alongside open access to the NFC function and any delay or frustration will be as a result of Apple refusing to negotiate.

“Apple is not a bank or a credit card scheme, and Apple cannot on their own complete a mobile payment,” he said. “Nor are the applicants manufacturers of mobile phones – both parties need each other to bring strong mobile payment offerings to the market.”