With Apple Pay now live in Australia via partner American Express, some major credit card rivals are feeling bitter about regulatory treatment that they consider unfair.
Quoted in The Sydney Morning Herald, the head of MasterCard Australasia, Eddie Grobler, pointed out that the fees American Express charges per transaction are largely unrestricted, while those of his company and Visa are capped, and argued that this results in a situation in which “the highest cost card for retailers and businesses to accept is able to incentivise consumers and benefit from the work of MasterCard and Visa, who along with our acquiring customers invested in the contactless infrastructure necessary for the unregulated proprietary Amex to grow.”
As the Morning Herald points out, the issue is a bit more complicated than that: Because Visa and MasterCard issue their cards through partner banks, they are subject to regulatory oversight limiting their fees, but the fees of Amex cards are also capped when they are issued through banks as Amex “companion cards”. Moreover, an Amex spokesperson asserts that the company was “an equal partner” in helping to establish the chip and PIN infrastructure needed to support mPayment solutions like Apple Pay.
Still, Amex has benefitted from being able to issue cards itself, a capability that also enabled the company to introduce Canadians to Apple Pay recently. MasterCard’s real enemy may in fact be the big banks themselves, which have proven recalcitrant in their opposition to Apple Pay, though they have their own arguments to make about fairness, since by charging the same 0.15 percent fee on transactions that it takes from US retailers, Apple is effectively asking for a greater proportion of their fees, which are lower than those of American banks. The merits of that argument aside, the banks’ opposition to Apple Pay is drawing opposition, with a government official recently having suggested their stance is anti-competitive.
Source: The Sydney Morning Herald