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Apple says banks can't touch iPhone NFC without harming security

Australian banks complain Apple Pay is unfair without even reading T&Cs

Apple has argued that allowing banks to use iPhones NFC chips independently of Apple Pay would compromise the phones' security.

The argument has been aired in Apple's response to the four Australia Banks who have requested permission to negotiate with Apple as a bloc rather than join Apple Pay. The banks want their own apps to be able to use iPhones' wireless payment parts and to get a slice of the cut Apple takes on each Apple Pay transaction, and asked regulator the Australian Competition and Consumer Commission (ACCC) if they could negotiate as a bloc.

The ACCC has now posted Apple's submission in reply, a letter (PDF) in which it argues that giving access to iPhones NFC would harm consumers by jeopardising security.

Apple staffer Marj Demmer says that “Apple upholds very high standards of security” by building “hardware, software and services … in a deeply integrated manner so we can provide the highest possible security. Providing simple access to the NFC antenna by banking applications would fundamentally diminish the high level of security Apple aims to have on our devices.”

The letter also points out that one of the four banks in the bloc argues that Apple Pay's condtions are onerous, but does so without having signed the confidentiality agreement Apple requires before it will explain the finer points of the service.

The main argument Apple advances is that the four banks want to get their hands on the iPhone's NFC to preserve their credit card businesses. Australian credit card interest rates often near 20 per cent, despite home lending rates currently being below five per cent.

Demmer therefore accuses the banks as motivated by a desire of wanting “to maintain complete control over their customers … to blunt Apple's entry into the Australian market.”

The submission says Apple is already talking to several other local banks and that the four who wish to negotiate together are only doing so to hold up the introduction of Apple Pay. Demmer also swipes at the four applicants' argument that without access to the NFC they'd be forced to accept Apple's conditions, a notion she says hasn't bothered the 3,000 banks worldwide who happily signed up for Apple Pay.

The ACCC will consider the submissions and issue a draft decision shortly. The regulator sometimes makes odd decisions regarding matters technological, so The Register will keep an eye on the case. ®

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