Will Apple Inc (NASDAQ:AAPL) Pay Australia Survive The Heavily Dominated Card Market?

Unlike in many other European countries, Apple Inc (NASDAQ:AAPL) Pay Australia is yet to find a solid operational ground given that Australians with an Android phone cannot use the payment platform. Apparently, Australia is one of the iPhone’s key zones because it makes over 35% of the local market but looks; it is not in any rush to enable the payment process. Apple Pay’s Australian rates remain unknown, a situation that presents a further challenge of introducing the system into the fee-phobic Australian market.

Meanwhile, various corporate the likes of CBA, NAB, Westpac, and Bendigo Bank are seeking approval from the Australian Competition and Consumer Commission (ACCC). The support will facilitate collective negotiations with Apple with a goal of gaining access to the NFC element within iPhones. This follows a call on the ACCC to stare down the banks.

Apple Pay Australia: Banks are also chasing the buck

Apple Pay Australia should be surprised by the bank’s unwillingness to adopt the payment process. It is because they are also interested in the buck. A submission from the banks reads, “Without access to the iPhone’s NFC functionality, there simply will not be the same incentives and ability to innovate for the benefit of Australian customers on either the iPhone platform or other platforms.”

The banks further argue that accessing of NFC functionality on the Android platform alone will not have similar results in comparison with integrated mobile wallets in Australia.  The former reduces the addressable market, and it has no match in regards to competition, efficiencies, and innovation.

Effects related to the payment system

Having been launched in late November 2015, Apple pay remains tied to users of American Express (Amex) cards only. However, unlike in Australia, Amex happily co-exists with other cards, which have wide acceptance. Nonetheless, it is Australia’s black sheep of the retail market perhaps because of the high merchant fees, which occasion the addition of 2%-3% surcharges for Amex purchases.

While Apple Pay Australia may find it difficult to locate its market, there is already strong presence of Amex and fourth-place Diners Club, which take up close to 20% of Australia’s card market. On the other hand, its success in Australia is likely to be based on productive partnerships with banks. But how possible is this given that the likes of Commonwealth Bank of Australia (CBA), which is the country’s largest issuer of credit cards with a 28% of the market? Apple’s stock last traded at $105.71 and witnessed a decline of $2.72 or 2.51%.

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