In comparison to global statistics, Australia has a very high use of Apple phones, but Apple Pay is struggling to gain customers. As reported in ComputerWeekly, only Amex cardholders can use Apple Pay. Unfortunately for those customers, Amex is not widely accepted:
“…in Australia Amex remains the black sheep of the retail market, largely because high merchant fees drive many retailers to add 2%-3% surcharges for Amex purchases. Many others simply don’t accept the cards at all.”
Not surprisingly, the lack of banks’ embrace of Apple Pay has to do with money. The regulated interchange caps forced on MasterCard and Visa transactions, plus the belief that Apple is looking for a transaction based revenue share similar to what they enjoy in the US has stifled adoption:
Card issuers have little room to move given the Reserve Bank of Australia-enforced caps on MasterCard and Visa charges, and $A0.12 per debit-card transaction (these do not apply to Amex and Diners Club, which operate in Australia under different structures). These limits might push Australian retailers to pass on merchant fees to their customers, which would be a disincentive to the scheme’s widespread adoption.
This could lead to more bank-based, payment applications for the mobile – focused Australian market.
Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group
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