Apple Pay is much more than a frictionless and secure payments service, Apple also thinks it will help accelerate the digital transformation of the banking industry.

Apple says so

Apple’s true intentions around Apple Pay are becoming easier to identify as the company goes through the Australian legal process in a disagreement with some (but not all) local banks.

In recent court filings reported by the Sydney Morning Herald, the company explained how Apple Pay-driven disruption of the banking system may help customers:

• By opening up the market to smaller lenders through the provision of an alternative to card payment systems.

• Increased competition should force better rates.

• Lenders should begin offering better promotional deals, such as air miles or cash back.

Apple points out that it has seen heightened competition in the sector in the U.S. and U.K. since launching Apple Pay. (One great example of this is the virtual Boon credit card service that’s emerging at this time).

“Apple expects that, with a range of payment cards available in [its] wallet [product] in Australia, the same increase in competition is likely to occur in Australia as has been evident in these other jurisdictions," the submission said.

Piggyback banks

Australia’s banks are fighting Apple because they want to pay lower Apple Pay fees and they also want to create their own payment apps that will piggyback on Apple’s secure NFC-based payment system. They have lost the legal argument so far.

In the background there’s another discussion – Australia’s government wants the banks to compete more for the good of consumers. Apple Pay can help achieve this.

There are some naysayers pretend the service hasn’t been such a great success, they’re wrong.

Source: computerworld