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ANZ deal shows Australia is key for Apple Pay

When trying to launch Apple Pay in Australia in late 2015, Apple couldn’t get banks to agree to the fee structure it wanted. Less than six months later it appears willing to compromise, with ANZ now offering Apple Pay in the country.

When Apple Pay landed in Australia in November 2015 only the American Express network had reached a deal with Apple – none of the Big Four banks would approve the fee structure the tech giant wanted. Things have now taken a turn, with ANZ reaching a deal to offer Apple Pay. However, according to ANZ only American Express and Visa cards issued by the bank can be linked to Apple Pay, signaling that a disagreement on fees still looms with MasterCard.

Since the launch of Apple Pay, adoption and use of the service has been low. For Apple to maintain its innovation image it is in need of positive adoption rates. Fortunately, we believe the country has the perfect payment environment to achieve this.

Australia boasts one of the highest smartphone penetration rates in the world. At the same time, over 80% of the country’s payment cards will be contactless by the end of 2016 as per our forecast – the highest rate among the developed markets. This is supported by a contactless payment threshold of A$100 (the highest in the world), which gives consumers a greater opportunity to use contactless.

Apple hopes Australia will become a showcase market demonstrating its Apple Pay initiative. It wouldn’t be a surprise if all of the Big Four are offering the service by Q3 2016.

By Arnie Cho, Senior Consumer Payments Analyst

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