> They're all still very upset about this, and would drop Apple Pay in a second if the NFC chip were forced open by a regulator
Not if the users have anything to say about that.
Canadian banks tried to do their own contactless payment on Android (TD Pay, lol), but nobody wants it. In the end they caved and finally offered Google Pay.
I predict it's gonna be similar. Even if Apple opens up NFC payment, nobody will use them and prefer 1st party support like Apple Pay or Google Pay.
Just see how many people actually use Samsung pay vs Google Pay.
To be part of Apple Pay, banks have to enter into an agreement with Apple. Though the details of this agreement are generally confidential, it's fairly well known that there is an Apple cut, and that that cut is rather high. (It's Apple!)
The moment a bank has the option to extract itself from this arrangement, it will. Not just because there's absolutely no reason to give Apple a cut of the bank's own business if the bank doesn't need to, but also because the bad blood between Aus banks and Apple is very real at this point.
> Even if Apple opens up NFC payment, nobody will use them and prefer 1st party support like Apple Pay or Google Pay.
And since that costs the bank money, it won't be an option. Also, I think the bank would think of itself as a first party in a payment made using their card, and Apple as a parasitic third party.
I'm not saying people won't grumble, but there is no way - unless Apple actually makes Apple Pay somewhat attractive to banks - that the banks will continue to support it if they don't absolutely have to.
(I'm not siding with the banks on this, I'm just trying to lay out their logic.)
The 15 basis points Apple supposedly charges for with card payments from Apple Pay is meant to come from the fraud budget; that a biometric-based authentication is consider both more secure and easier to counter payment disputes. The rest comes from the convenience and hope that actually results in more card payments.
In the US where there's no PIN, fraud is high. Parts of the country are still heavily cash based, so there's a good margin to gain if added convenience results in more card payments.
For heavily credit card based markets with chip-and-pin, you have less fraud concerns and less to gain from convenience.
My take though is that even if apple opens up the NFC chip, they aren't opening up the Secure Enclave. So even if a bank app can take over the NFC chip, they still will have secrets in memory at some point without a new P-256 based payment protocol.
Unless this is a new app backed by a bank cartel, you'll also go from being able to use multiple cards to just one first-party card.
This all leads to my opinion of a pretty wonky situation - opening NFC up probably increases the value of Apple Pay, since it can now be compared to other software-based wallets by users, and Apple Pay support again becomes a differentiator for the payment card.
> My take though is that even if apple opens up the NFC chip, they aren't opening up the Secure Enclave. So even if a bank app can take over the NFC chip, they still will have secrets in memory at some point without a new P-256 based payment protocol.
The NFC chip is itself a secure enclave. (It's called a "secure element" but same thing.)
It does its own key storage, which is why it can work when the phone is turned off.
> This all leads to my opinion of a pretty wonky situation
Yep, that's sadly accurate for all the banks' other tech, so I see no reason they'd shy away from it here either.
I feel like you're coming at this from the wrong angle. No one is saying Apple Pay is bad, or that the banks' solutions will be better. The question is: will banks voluntarily give up a cut to a third party intermediary, when they can roll a slightly-less-convenient-but-good-enough tech stack and keep all the money for themselves?
One doesn't exactly become a top 4 bank by handing out a cut to intermediaries willy nilly. Even if the Apple cut were eliminated (unrealistic), the banks would need a very good reason to allow an intermediary between themselves and their customers at all.
The NPP is about removing the Visa/MC networks from the equation. It would also remove the EMV requirements, if I'm identified by my mobile phone number + biometrics linked to a bank account, which can have it's own credit line associated with it, why does the bank need to support Visa/MC?
The new payment platforms with instant settlement effectively remove the branding and merchant agreements that Visa/MC offer.
Person A can transfer money to Merchant M immediately, no intermediaries except the two banks/account provider and the payment platform usually run by the central bank.
Owning a bank is an extreme regulatory headache. You always want someone else to be the bank. Or even better multiple someone elses - in the US, small banks are allowed to do things large ones aren't, so you sometimes gather up a bunch of them and become a single proxy for them.
They probably won’t do that in the current antitrust climate. I hope the DOJ and the EU continue probing the big companies because I’m sick and tired of my non-ecosystem device choices not working well together.
Apparently, too, merchants aren't actually charged for Apple Pay, it's the banks themselves that are. Merchants apparently pay the regular charge to their payment processor whether I use my Visa-through-Apple Pay or my Visa as a physical card. https://paymentdepot.com/blog/apple-pay-fees-for-merchants/
At any rate, Apple Pay is ridiculously convenient compared to anything my bank has ever come up with. The last time there was a Pay With Bank $X thing on a website that I tried, I ended up getting directed through some kind of Verified by Visa thing where they were asking for some kind of security code that I don't recall ever setting up. Or... I can double-tap the power button on my phone to verify a payment I'm making on my laptop. If the banks are unhappy about giving a cut to Apple, my recommendation to them would be: Suck Less.
For example, a bank could offer partial rewards for using their payment system, over Apple's. The effect would be the same as passing on the savings to the consumer.
Given the software that banks generally produce, it’d have to be a sufficiently good reward. If I’m buying a $10 sandwich at a deli counter, I’m going to double tap my power button and tap my phone on the debit machine. A $0.03 cash back isn’t worth the hassle to fish around to find my bank’s app, enter a secure password, and then enter a 2FA code. I had another comment elsewhere in this thread: want me to use the bank app instead of Apple Pay? Make the bank app suck less.
I don’t get charged for using Apple Pay, I get charged for the processing fee for the card I used (which is an entirely separate discussion), and given the option between “just continue using Apple Pay” or “download several janky apps just because the bank wants its own wallet impl”, I’m going to stick with Apple Pay.
If Apple is getting 0.15% as stated in a sibling, it's coming from somewhere. Maybe it's added on top of the fees the merchant pays, and like other payment fees gets kind of mixed into the price of everything you buy. Maybe it comes out of the fees your bank gets on purchases, which will reduce their income and then they'll need to increase fees, reduce benefits for depositors, or reduce dividends to investors.
Yeah, I have no interest in keeping 15 digital wallet apps, even if they offer incentives, for the same reason I don’t carry a physical wallet for each physical card.
Now I could see an argument for wallet apps being generic so e.g. the apps for Chase, BofA, SoFi, etc could carry all the user’s cards like Apple/Google wallet should the user want that, but I doubt banks would have much interest in that (at least if it’s privacy respecting and not skimming transaction history) because it’s not prying mindspace away like per-provider apps do.
It should be assumed that if the banks get an opportunity to implement their own NFC payment system on iPhone, they’ll switch off Apple Pay. Otherwise no customer would have any incentive to migrate over. And the incremental cost of Apple Pay is too little to be redirected towards some customer incentive program.
(Of course that doesn’t preclude a bank from making an irrational decision.)
Eh, maybe not in Australia. Remember Australia doesn't have like 5 million banks, we have essentially 4 big ones and they already are pretty cutting edge vs US/Canadian banks. i.e instant transfers are normalized, NFC is the norm, apps and Internet banking have been very good for about 10 years.
If the NFC chips were opened up through regulation I have zero doubt Australian banks would just say "we support contactless with our first party app" and that would be the end of that until Apple asked for a more reasonable cut.
When all your banks suck and Apple seems to be the only people with their shit together, sure but Australia doesn't live in that world.
Canada has essentially 6 big banks, instant transfers using Interac has been the most common way of transferring money for years (it launched in 2003) and payment using NFC has been the norm for a decade.
The mobile phone apps are probably just as bad, but e-transfers (Interac, EMT, whatever you want to call it) generally work pretty well. And they're still somewhat of a hassle compared to I guess Venmo or Cashapp or... I've never used those but they seem pretty slick in comparison to having to go into a banking app, set up an EMT Payee using email/phone number, set a password on the transaction, hope that they remember to cash the EMT before it expires, etc.
> When all your banks suck and Apple seems to be the only people with their shit together, sure but Australia doesn't live in that world.
ANZ was too busy charging dead people to bother implementing it. God only knows what westpac was up too, NAB had an implementation on Android, and having used it a bunch, it was _awful_ and I was glad when they gave up and just accepted the alternative. Combank did their own thing, and seemed the furthest along, but support seemed patchy and they ended up junking their solution anyways and going to Android/Apple pay anyways IIRC.
These places can hardly manage to maintain their own apps, I have about zero confidence in them deciding to wander off into the wilderness and trying again.
Not to mention, all the non-big-4, and all the smaller banks probably won’t bother with reimplementing NFC pay as they either don’t have the resources, or can’t rely on institutional-inertia to foist useless changes onto their customers.
The CBA Android app supports contactless, or you can add your card to the Google wallet. It seems to work equivalently well (although the enrolling bit has less friction in CBAs own app).
> […] we have essentially 4 big ones and they already are pretty cutting edge […]
The Big Four are not the cutting edge, it is a delusion. Out of four, only the Commonwealth Wank has transitioned onto a modern core banking platform for retail banking. Business accounts still run on the legacy core banking platform, if my understanding is current and accurate.
The remaining ones are as backward (from the technology POV) as they have always been. Westpac acquired St George Bank in 2008 trumpeting their core banking platform as the reason for the acquisition and the intention to transition onto it. To the best of my knowledge, that has not happened as of 2024, and Westpac contunues to use its own legacy core banking platform disjointly from that of St George's. Moreover, banking is not even integrated between the two even today, and the St George core banking has fell into a state of disrepair – EFT's can take a few days to reach the receipient's account depending on the receipient's bank.
The actual – pretty much only – innovator is Macquarie Bank that has invested a lot into revamping their banking platform from the ground up, plus neo-banks – newcomers to the banking market albeit niche ones.
The Big Four (or, most banks in general) loathe technology and IT as they see both as a liability, not a competitive advantage, due to tech not being their core business and due to being run by old farts with ossified brains. And that was the reason why they started rapidly losing millenials, Gen Z and other young customers to neobanks. It was a wake-up call for them.
> […] instant transfers are normalized […]
… and it has nothing to do with the Big Four. The Big Four, in fact, sabotaged instant payments for many years due to a lack of interest to advance the payment technology, and the instant payments in Australia only succeeded at the third (or at the fourth – I have lost the count) attempt after the Reserve Bank held the Big Four at a gunpoint and threatened them with severe penalties if they pull out again, as they had done every single time before. Instant payments in Australia are done via NPP/Osco, an independent company set up by the RBA, a BPAY subsidiary, and the Big Four as well as other local banks are mere users of it. None of the four control NPP/Osco payments, and that is a very good thing.
> If the NFC chips were opened up through regulation I have zero doubt Australian banks would just say "we support contactless with our first party app" […]
… and users would be left with the atrocious quality banking apps and with banks tracking the users all the way down into the customer's colons.
User tracking was the actual reason behind the spat between the Big Four and Apple – the former wanted to get a way into users' smartphones and all sorts of device and chip ID's – to track the user behaviour to which Apple said no. As a customer, Apple's stance suits me way more.
Of course, banks have found other ways to track the iPhone users courtesy of advances in the big data science, although the attempt has been somewhat hampered. The Big Four are the largest employers of data scientists and for a reason.
You can't be naive and look at the Big Four through the rose tinted glasses – they are in the business of making very big money and treat their customers as acquisition assets and cows to milk. Commonwealth Wank has been onselling the transaction information to Equifax (other than reporting the credit history), and Equifax has been onselling that transaction information to some pretty shady loan shark companies.
> and Westpac contunues to use its own legacy core banking platform disjointly from that of St George's
It's so difficult to do this stuff. I firmly believe they should just start a new tech-focused bank from the ground up, and transition customer to it gradually over the subsequent 10 years. Maintain 2 apps; shift to a new backend gradually. But I think it has to be in-house, and built with this in mind. Mergers don't work with banking tech.
Westpac has been saying just this week that their big transformation will be done in the next few years.
I've never worked in banking but having seen some other big transformation projects in my career, I'm not optimistic.
Samsung isn't even interested in Samsung Pay. I work at an FI, and have submitted an application repeatedly to integrate the SDK. We have yet to receive a response.
I use Samsung Pay in Spain. I like it because it's better integrated on my phone and more importantly I don't need a Google account for it. I don't even have one set up on my phone.
Of course Samsung does see my data this way but they have less info to correlate with. Also I don't use many of their services.
I do wish there was a truly open payment solution though that doesn't require me to trust a big tech party.
> I do wish there was a truly open payment solution though that doesn't require me to trust a big tech party.
Cash? Everything else needs a relying party of some kind in order to facilitate the transaction. If it's a credit card or digital wallet, the transaction passes through the credit card or debit card networks, and your info is logged and, depending on laws, potentially re-sold.
Don't get me wrong, I sometimes feel like Google shouldn't know my location either, but if my cell carrier already knows my location, I actually trust Google to not resell my location more than my cell carrier - it's worth more to Google if they're the only ones with that information and the same applies to Apple.
Another way of putting it, rules and regulations, strictly enforced and updated, is probably the only way to prevent tracking and abuse by legitimate big actors.
> If it's a credit card or digital wallet, the transaction passes through the credit card or debit card networks, and your info is logged and, depending on laws, potentially re-sold.
The reliance on credit card networks is part of the problem. There's no way to avoid them. And they're all from the US. This causes privacy issues but also moral problems because they tend to block sexually oriented products and services. In Europe a lot of countries are way more progressive than the US.
I was hoping bitcoin would become this system but obviously it's been completely hijacked by speculators and its original purpose of control of ones own money has been perverted.
There really should be a digital alternative for cash though. It's really silly that we still have to drag around pieces of linen and metal.
And no, I don't trust Google for anything at all. I don't want them making money off of me. I also block a lot of ads of course.
Debit cards don't all have to be processed through credit card networks, it's easier to do it that way. Websites could also take direct bank transfer payments if they felt like it, but it would hard internationally.
Not if the users have anything to say about that.
Canadian banks tried to do their own contactless payment on Android (TD Pay, lol), but nobody wants it. In the end they caved and finally offered Google Pay.
I predict it's gonna be similar. Even if Apple opens up NFC payment, nobody will use them and prefer 1st party support like Apple Pay or Google Pay.
Just see how many people actually use Samsung pay vs Google Pay.