An Australian parliamentary committee has held a public hearing at which it heard evidence from representatives of leading Australian banks, payment services providers and other financial bodies on regulatory issues including whether companies such as Apple[1] should be mandated to allow third-party payment apps access to a smartphone’s NFC chip.
The issue was brought to the hearing on possible regulatory reform after a number of written submissions made to the Parliamentary Joint Committee on Corporations and Financial Services’ ongoing mobile payment and digital wallet financial services[2] inquiry “raised concerns with Apple restricting direct access to the NFC chip in its mobile devices, potentially stifling innovation and increasing transaction costs for mobile payments”.
“These submissions argue that this practice has triggered regulatory intervention and antitrust investigations in some international jurisdictions, including Germany, the Netherlands, the UK and the EU,” the committee said in a written request sent to Apple before the hearing.
“While Apple’s own submission points out that banking apps and digital wallet providers in Australia are able to initiate NFC payments on iOS devices, these transactions must still be routed through the Apple Wallet and the Apple Pay platform, thereby potentially incurring additional costs for merchants and card issuers.
“This practice is different from Google’s approach with Android devices, on which third parties have direct access to the NFC chip.”
Restriction concerns
At the public hearing itself, the committee heard evidence from witnesses who reiterated these concerns about whether Apple’s restriction of access to the NFC chip in the iPhone would limit competition and innovation in the digital payments market.
“If there is an actual or possible restriction on being able to access devices, which are critical to the payments infrastructure, that would impede competition, and obviously that is not something that we
