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Monday, 05 December 2016 11:44

Banks v Apple: a fight the locals cannot win

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Four Australian banks, that have more or less lost the fight to take on Apple as a cartel for negotiations to allow their card holders to use Apple Pay, are fighting a losing battle on all fronts.

If Westpac, the Commonwealth Bank, NAB, and Bendigo and Adelaide Bank really think they have any chance of prevailing in a fight with the world's richest technology company, then they are delusional. And that is putting it mildly.

For any company to even contemplate that it has a chance of getting Apple to disclose its own trade secrets, it has to be residing in some other universe. If the ACCC, which has indicated that it will rule against the banks, has a sudden change of heart and rules against Apple, then the company can just refuse to negotiate with the four at all.

Apple, remember, is a company that refused to bow before the might of the FBI when it came to disclosing secrets about its encryption technology. And this was a fight over a terrorism case, a category in which Apple could not hope to win public sympathy.

As an aside, it is pertinent to mention that none of the four big banks will ever find people on their side when it comes to anything, given the way in which they gouge every cent possible out of the public.

Thus, for these banks to argue that what they are doing is aimed at benefitting the public is not something that anyone will swallow. (It is somewhat surprising to find Bendigo and Adelaide Bank, an organisation that claims to be a community bank, joining the other three, but then when it comes to likely profits people will often do anything and everything.)

The arrogance of the four banks in trying to obtain permission to function as a cartel is only matched by their ignorance in over-estimating their bargaining power.

Australia is a nation of roughly 23 million people and this is often forgotten by those who wonder why this technology or that is often not made available here at the same time as other countries.

Companies are only bothered about market size and that is why most products take in the bigger markets first. Thus, the US and China are often the first in line for this very reason.

So if the banks think Apple is going to keel over at the fact that the customers of these four banks — and that is a much smaller slice of that 23 million — are unable to use Apple Pay through their financial institutions, then that is wishful thinking of a very high order.

Already ANZ and a couple of others have cut their own deals with Apple over Apple Pay. It is time for NAB, Westpac, CBA and the Bendigo and Adelaide Bank to give up, admit they hold a hand with no aces at all, and negotiate separately with Apple.

That is, if they are really interested in giving their customers the chance to use Apple Pay with cards issued by them.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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