Australia and New Zealand Banking Group (ASX: ANZ) is the first of the big four Australian banks to sign up for Apply Pay.
That means that ANZ customers will be able to register their credit card and debit cards in Apple's digital wallet on their Apple devices and use that device to pay for products and services at contactless terminals.
ANZ, Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC) have already agreed to support Google's Android Pay on Android devices with near-field chips (NFC).
CBA and NAB already have the functionality in their Android apps to allow users to pay with their smartphones, while Westpac's current app only supports several versions of Samsung's Galaxy smartphone.
Australia already has a high proportion of consumers already using contactless methods of paying for goods and services – with an estimated 60% of all card transactions now contactless. Compared to other countries, including the US and the UK, that's very high. Figures from the UK card association showed that just 2% of total spending was done using contactless technology in January 2016 – but it's more than 3 times the 0.6% in January 2015. In the US, an estimated 18% of households now use mobile payments.
The biggest concern of the banks is that Apple wants a share of their transaction fees. Each time a user swipes their credit or debit card and now their smartphone over a terminal, the merchant pays a fee to their bank. Apple will now take a tiny slice of that, but it's an extremely valuable slice. Apple's CEO Tim Cook noted that Apple Pay was growing at a tremendous rate, with 5 times more transaction value than last year and one million users signing on each week.
Foolish takeaway
No doubt the rest of the banks are likely to follow and sign up for Apple Pay, given they have already given their support to Android Pay. Not doing so could give ANZ an advantage given the number of Apple iPhone and Apple Watch users in Australia.
