Some of Australia’s leading banks — including three of the Big Four — are asking the ACCC to let them negotiate as a group with the mobile wallet providers. The move appears to be about standard setting, and not price.
“The application does not request authorisation to enter joint negotiations on the amount of fees or charges, meaning financial institutions are responsible for individually negotiating contractual arrangements with wallet providers,” say the parties.
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In their submission, the banks tell the ACCC that they “… 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. The applicants also seek authorisation to enter into a limited form of collective boycott in relation to a third-party mobile wallet provider while collective negotiations with that provider are ongoing.”
A key driver appears to be the fact that major public transport systems in Australia are set to begin trials of open-loop contactless payment technology.
According to the parties — which include Bendigo and Adelaide Bank, the Commonwealth Bank of Australia, National Australia Bank and Westpac — if the application is granted, other businesses and institutions can join negotiations if they believe it would benefit their customers.
In a statement issued by the NAB, the bank says “… the applicants want to ensure that Australian consumers can make payments easily through their choice of mobile wallet providers, have access to the latest developments in contactless payment technology, and can benefit from common security standards across the mobile payment system.
“The applicants believe consumers will benefit if they can choose the best mobile wallet that suits their own needs using their own devices. That way all consumers could have access to new features, apps and technologies developed by the makers of different mobile wallets.”
According to Novantas Senior Advisor Lance Blockley, on behalf of the applicants, “This is about providing Australians with real choice and better outcomes. If successful, the application would have tremendous benefits for the entire Australian mobile payments landscape including for public transport fares, airlines, ticketing, store loyalty and rewards programs and many more applications yet to be developed.”
NAB argues that Australia is at the forefront of contactless card payments, and that these have been well accepted by consumers and merchants. “The negotiations, if successful, will ensure that consumers and merchants can be confident that Australia has a competitive, innovative and transparent system of mobile payments, including third-party wallets.”