The collision course between Apple and the banks

A concept that at the release of the first iPhone, in 2007, seemed unthinkable, but the reality is that that small device – difficult to call it just a phone – has changed the way we experience music, entertainment, photography, personal relationships. , work. And also the way in which we manage work, such as home and money, becoming no longer an accessory but an essential object for everyday life. Its very rapid evolution now brings it into collision with the banking world. Apple’s launch of the “tap and go” payment system, followed closely by Google, was a revolution from which there is no turning back. Digital wallets built into our phones are rapidly replacing debit and credit cards, eroding the reach of banks. ApplePay has its own credit card, and with the announced launch of its buy now pay later system it poses an even greater threat to the power of traditional companies, allowing you to pay in installments without interest and without entering the credit card debit circuit. But the way Apple – and the iPhone in particular – threatens the power of banks is broader and more subtle. Not only through proprietary payment systems, but also and above all thanks to a network of apps that have revolutionized the way we manage finances and payments without ever having relations with the physical bank. And if Apple and Google decide to get involved in the first person, the issue becomes more complicated and more serious.In Australia the clash is already on, and is emblematic of how things could progress in the future also in the rest of the world. One of the biggest points of contention at the moment concerns Apple’s attempt to restrict access by Australian banks to the payment chip on iPhones, all while thanks to open banking it has the opportunity to freely access the data of customers of the same banks. The response from top executives has been caustic, with Commonwealth Bank director Matt Comyn commenting that “mobile device manufacturers can now decide the terms under which banks can offer their services to customers.” And the director of the Reserve Bank went deeper, with an analysis that probably expresses the thinking of all bankers in the world. In a parliamentary hearing he asked for a review of the regulation of payment systems. “There is a need to update the legislation on the matter, perhaps including a special licensing regime for payment providers.” In fact, at the moment both Google Pay and Apple Pay are in a gray area where they cannot be qualified as “systems of payment”. Apple alone has 80% of tap and go payments in hand, and as it enters the world of buy now pay later, its power and hold on consumer finances continues to grow. Banks have a clear fear of letting these unregulated giants continue to grow by taking over the payments system with no relation to government powers other than the feeble bond of taxes due for their business.