Apple Pay launch in Australia could be delayed as Apple negotiates with banks over transaction fees

Apple Pay certainly has a long way to go before it becomes ubiquitous. The service is currently available on a limited basis in the United States and the United Kingdom and is yet to hit major markets such as Canada, Japan, Germany, Italy and more.

Apple reportedly charges around 15 cent on every $100 transaction done through Apple Pay in the United States, and the company seems to be asking the same fees in Australia. However, in Australia, the interchange fees is half of what it is in the United States, which makes the 15 cent (or o.15%) fees per transaction tougher to digest for banks.

The Australian banking sector is significantly advanced when compared to the US market. Almost all the major banks in the country have been offering NFC based payment options for Android devices since the last 2 years, so Apple bringing Apple Pay into the country will not bring about a major revolution in the country’s banking segment.

Additionally, the report claims that major banks are not too keen on providing Apple with access to their payment infrastructure since they are investing millions of dollars into building the New Payments Platform, which will have real-time capability, that the Cupertino headquartered company will be able to enjoy without investing a penny. Secondly, banks in Australia realise that being the “interface” when a customer does a transaction will likely fuel their future revenue growth, which is why they don’t want Apple to come in and take their place with Apple Pay.

Wrapping it up
To sum up, here’s what the general mobile payment structure looks like in regard to Apple Pay and common practices:
  • In the United States, Apple earns about fifteen cents on every $100 of transaction.
  • In the United Kingdom, however, banks were successful in negotiating Apple down to a much lower fee so the iPhone maker is receiving only a few pence for £100 of transaction.
  • Interchange fees in the United States are about $1 for $100 of transaction.
  • Interchange fees in Australia are fifty cents per every $100 of transaction, or about half the US level.
  • Banks in Australia earn a whopping $2 billion in interchange fees collected from merchants each year.
  • Apple has been asking for the same amount of interchange fee in Australia.
  • Australia’s major big banks won’t agree to Apple’s terms.
  • Banks also don’t like Apple Pay as it’s another layer between them and customers, preventing them from providing “overlay” services at the point of sale.


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