Thursday, August 18, 2016

Apple says opening up iPhone NFC would ‘fundamentally diminish’ security as Australian banks resist Apple Pay


Banks Teaming to Get NFC for Digital Wallet Application

Apple has not taken well the way banks have been teaming up to get their own products on the iPhone which became clear when three Australian banks attempted to pressure the tech giant in giving it access to the iPhone’s near-field communication – NFC, chip for their own digital wallet application. NFC enables the user to tap your iPhone at the register in order to pay for the goods and services.

Apple Pay tends to permit iPhone and Apple Watch users in making contactless disbursements at merchandising outlets in the United States, the United Kingdom, China, Canada, Hong Kong, Singapore, France, Switzerland and Australia. Users need to just tap their devices on normal merchant contactless terminals for disbursement rather than utilising cash or debit/credit card.

Apple Pay will be coming to the web later in the year, supporting Apple Pay transaction on macOS also. Apple had made a formal complaint to the Australian Competition and Consumer Commission in reaction to conflict from Australian financial institutions in accepting Apple Pay. Apple has stated that the three largest banks of the country have formed an anticompetitive union and together have been dictating terms of new payment business models such as Apple Pay.

Enabling Banks – Weakens Security

Apple had responded to their request recently with strongly phrased letter which was revealed on Tuesday clarifying that enabling the banks in having their way would essentially weaken the high level of security which Apple has focused to have on the devices.

The NFC of the iPhone is said to be the critical piece of tech which tends to power Apple Pay and the company has kept it under lock and key which is utilised mainly for its own service. Apple Pay introduction had given rise to customer awareness in mobile expenses and hundreds of monetary institutions all over the world have partnered with Apple Pay to enable their customer to connect their bank accounts to their iPhone digital wallets. However, Australia tends to claim of only one participating bank, namely ANZ.

So far Apple has been unsuccessful in negotiating the terms with any of its competitors that seems to be jointly refusing the services.The National Australia Bank, the Commonwealth Bank of Australia and Westpac Banking Corp are making efforts of challenging the digital wallet monopoly of Apple on the iPhone by appealing to the regulator, the Australian Competition and Consumer Commission, of the country.

Regulator to Consider Arguments of Both Group

They desire approval to negotiate with Apple with the expectation of installing their own mobile payment scheme on the device. However, Apple is not having any of it and in its letter to the regulator has send a warning to the banks that it would not permit external parties to control its future hardware and software verdicts, particularly when they team up against the company.

It reads thus “allowing the banks to form a cartel to collectively dictate terms to new business models and services would set a troubling precedent and delay the introduction of new, potentially disruptive technologies”.

The complete letter also comprises of specific legal arguments by Apple on why the requests of the banks should not be taken ahead by the ACCC. After August, the regulator would begin to consider the arguments of the groups from both ends inclusive of Apple and the banks. No comments have been provided from the representative of the banks, to the requests for comment.

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