Australia’s largest banks are balking at Apple Pay’s fees and slowing down the rollout of the payment service in their country, The Sydney Morning Herald reports. Apple is reportedly demanding the same 15 cents on every $100 of transactions that the company is believed to receive from banks in the U.S., even though banks in Australia make half as much from interchange fees as compared to their U.S. counterparts.
British banks struck a much tougher deal than those in the U.S., paying only a few cents on each £100 of transactions. With the reserve bank of Australia threatening to push interchange fees even lower — down from 50 cents to around 30 cents on each $100 of transactions — the timing of Apple Pay’s entry into the market makes the stakes of negotiations even higher for Australian banks.
Apple’s slice of the estimated $2 billion in interchange fees isn’t the only issue holding up talks.
Commonwealth Bank of Australia chief executive Ian Narev said the CBA has been offering the same functionality to users through an app for Andriod phones for 2 years, so the introduction of Apple Pay isn’t as innovative in Australia as it was when it was introduced into the U.S. market in October 2014. Westpac, another Australian bank, also allows customers to pay with an Android phone, but notes that most customers still prefer to pay with their cards.
