Prospa Seeks $500m in SME Loans After Raising

From Smart Company.

Small business lender Prospa is gearing up to hire an additional 100 employees in its next stage of expansion, after this week securing a $25 million cash injection in what is believed to be the largest fintech venture capital investment in an Australian business.

The 2016 Smart50 winner says the investment round, led by Australian venture capital firm AirTree Ventures, will shore up the company’s ability to dominate the small business lending landscape on its path to writing more than $500 million in loans.

“It’s a great story for Australian VCs, and really just cements the general market awareness of how Australia can build great tech companies,” co-chief executive Beau Bertoli tells SmartCompany.

Prospa will be using the funds to further develop the technology side of the business, and with several new projects on the go, Bertoli says the funding injection will also allow the business to keep investing in people.

“It does require a lot of people—the costs are going to be in hiring, we’re going to be looking to hire about 100 over the next year. We’ve put a lot of thought and planning into it this year—it’s not the first time we’ve tried it,” he says on hiring big cohorts of staff at once once.

The Prospa platform, which allows small businesses to apply for unsecured loans of up to $25,000, launched in 2011 and previously raised $60 million in capital in September 2015.

The lender has written more than $250 million in loans, and recorded revenue of $22 million for the 2016 financial year. The current valuation of the business is $235 million, says Bertoli, and while that’s a “substantial” number for an Australian fintech operation, he believes there’s still plenty of room to grow.

“We’ve got a really long way to go,” he says.

“It all comes back to the customer problems, and they can all use capital at different times.”

Prospa has developed a number of strategic partnerships with the likes of Westpac and Mortgage Choice, but Bertoli says the company’s connection to smaller operations has also contributed significantly to its growing the loan base.“We work with around 4,000 partners around Australia, from Westpac to small little accounting firms,” he says.

“That gives us access to well over half of Australia’s small business customers. We’re able to work with lots of [those partners] and get access to their customers.”

US Banks Launch Payment App

From Bloomberg.

For years, US banks have watched as their youngest customers split restaurant checks, shared utility bills, and pitched in for parties using third-party payment apps such as Venmo.

Now they’re trying to take back the person-to-person payments business by launching an app of their own.

Nineteen banks, including Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo, are teaming up to start Zelle, a website and app that will let users send and request money much as Venmo does. Bank of America says it is the first to incorporate all of Zelle’s capabilities—including the ability to split bills between users—into its own mobile app, starting today. A standalone Zelle payment app should be available to anyone with a debit card, regardless of where he or she banks, by the middle of the year.

Bank of America's upgraded payment app. Source: Bank of America

Zelle has some stiff competition from Venmo and its parent company, PayPal Holdings Inc. Venmo, which started in 2009, processed $17.6 billion in transactions last year, a 135 percent increase from the previous year. In the common vernacular, “to Venmo” means to move money to and from friends and family. That’s a huge advantage, said Michael Moeser, director of payments at Javelin Strategy & Research. When presented with another option, “An avid Venmo user is going to ask, ‘Why do I need something else?'” he said.

Zelle’s not-so-secret weapon is its connection to the big banks where millions of Americans keep their money. Request $40 from a roommate over the Zelle network using BofA’s app, and the money shows up in your account within minutes of when he agrees to send it. On Venmo, that $40 would show up in your Venmo wallet right away, but then it stays there. To get the cash into your hands, you need to log into your Venmo account, cash out your balance, and wait—sometimes days—for the money to show up in your bank account.

Venmo is trying to accelerate that process. PayPal made deals with Mastercard Inc. and Visa Inc. to move money over their debit card networks. By the middle of 2017, it should be possible to cash out a PayPal or Venmo account instantly, according to PayPal Holdings spokesman Josh Criscoe.

Zelle was built by Early Warning, a bank-owned company that also runs the clearXchange payment system. It’s no easy task to build an app that syncs with 19 large banks, four payment processors, and two card networks. Each has its own legacy technology, and many already have person-to-person payment tools, such as Chase’s QuickPay, that are popular with some customers.

To launch the new app without disrupting the old systems, Zelle is being rolled out in phases. In the first, under way now, bank payment apps will incorporate Zelle’s options and basic design without any Zelle branding. Banks can add these features whenever they’re ready.  Later, bank apps will tout Zelle branding, and, sometime in the first half of the year, a standalone app will be launched.

BofA’s person-to-person payments will be free. Although members of the Zelle network will have the option to charge, it’s not clear if any banks will even try to do so when Venmo and other payment apps cost nothing.

The lack of an obvious revenue opportunity may be one reason why it has taken so long for banks to launch a serious competitor to Venmo. Moeser summarized the attitude of banks until recently: “Do I really care about two 18-year-olds sending $20 to each other? Maybe not.”

But the people designing Zelle imply their goal is much bigger than just helping college students split a pizza bill.

“This is a great time for us to move [person-to-person payments] from millennials to mainstream,” said Lou Anne Alexander, Early Warning’s group president for payments. The use of mobile banking apps is expanding exponentially, creating many more opportunities for people of all ages to send and request money. “Any place we see checks and cash, that’s our target,” she said.

Because Zelle is sponsored by and connected to their banks, Alexander said users should feel more comfortable using it for larger transactions and for a broader array of uses, from paying a contractor to collecting money for a school dance team. Zelle may also be used for business-to-consumer payments, such as insurance companies paying out claims.

Anything that promotes the use of digital payments is ultimately good for Venmo, said PayPal’s Criscoe. “The common enemy is cash.”

Zelle and Venmo have a lot in common with one major exception. Venmo is also a social app, where users can and do choose to make their transactions, along with any associated emoji-filled messages, public. Criscoe said the average user checks Venmo two to three times a week just to see what his or her friends are up to.

Zelle users won’t have the option to spy on their friends’ payment activity. The idea was tested on consumers but fell flat with Zelle’s intended audience, Alexander said. “While appealing to some ages, it’s not really appealing to all.”

Why Trusting Experts Is Dissipating

In her final speech as Deputy Governor for Markets and Banking, before becoming Director of the London School of Economics, Minouche Shafik sets out an agenda for rebuilding the trustworthiness of experts. She says, “getting this right is vital for determining whether our futures are shaped by ignorance and narrow-mindedness, or by knowledge and informed debate”.

Addressing the Oxford Union, Minouche explores the backlash against experts after the financial crisis, Eurozone crisis, Brexit, and election surprises. As well as being seen to have “got it wrong”, the growing influence of social media and online news has made experts just one of many voices in a cacophony. “A person like yourself” is now seen as credible as an academic or technical expert, and far more credible than a CEO or politician.

However, the application of expert knowledge has improved life expectancy, tackled diseases, and reduced poverty. These achievements have led to many decisions being delegated to experts deliberately insulated from the political process, including the creation of independent central banks as a means to maintain low and stable inflation. Minouche stresses, however, the importance of experts being subject to challenge and rigorous processes to differentiate quality and reduce the risk of getting it wrong.

The changing landscape of information, opinion and trust

The digitization of freely available knowledge has been hugely democratizing and empowering. Young people are particularly reliant on social media, with 28% of 18-24 year olds saying it is their main source of news, putting it ahead of television.

But there has been a downside – “people can be overwhelmed with information that is difficult to verify, algorithms create echo chambers of the like-minded who are never challenged; fake news distorts reality; “post-truth” fosters cynicism; anonymity bestows irresponsible power onto individuals who can abuse it; a world in which more clicks means more revenue rewards the most shrill voices and promotes extreme views,” Minouche argues.

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We need expertise more than ever. But confidence in experts is at an all-time low. Transparency is not good enough if information is inaccessible and “unassessible”. Instead, we should focus more on increasing trustworthiness.

An agenda for rebuilding trustworthiness

Societies can set standards and empower individuals to assess trustworthiness for themselves. There are many elements to such an agenda:

  • Experts should embrace uncertainty – Minouche argues that “rather than pretending to be certain and risk frequently getting it wrong, being candid about uncertainty will over the long term build the credibility of experts.” Coupled with the need to get their often complex messages across in today’s shortform world, this means “the modern challenge for experts is how to communicate with brevity, but without bravado.”
  • Good practices often found in academia (like declaring conflicts of interest, peer review, and publishing underlying data and funding sources) need to become more widespread to the world of think tanks, websites and the media.
  • Consumers of expertise need better tools to assess quality – Minouche highlights the importance of people being given the tools to “differentiate facts from falsehood”. The e-commerce world has developed an array of tools to help consumers determine quality. We need something similar for the world of ideas. Good examples are the growth of fact-checking, authoritative websites and the FICC Markets Standards Board, which are designed to enhance trustworthiness in areas where trust has been eroded.
  • Listen to the other side – Minouche states that “we can all make an effort to engage with views that are different from our own and resist algorithmic channeling into an echo chamber.”
  • Manage the boundary between technocracy and democracy carefully – Minouche stresses that “technocracy can only ever derive its authority from democracy.” And for that reason there must always be clarity about the boundaries and accountabilities between experts and politicians.
    Minouche concludes, “so what have the experts ever done for us? The application of knowledge and the cumulation of that through education and dissemination through various media and institutions are integral to human progress. So the challenge is not how to manage without experts, but how to ensure that there are mechanisms in place to ensure they are trustworthy.”

Aussie fintech investment defies global dip

From Fintech Business.

Investment in Australian fintech companies remained strong in 2016, despite an almost 50 per cent decline in global investment figures, according to KPMG.

KPMG’s Pulse of Fintech report, released today, found an overall investment of US$656 million into Australian fintech in 2016 across 25 deals, up from $185 million across 23 deals in 2015.

Successful funding rounds by Tyro and Prospa were listed as factors resulting in a strong year for Australian fintech, alongside the acquisition of Pepperstone by CHAMP Private Equity.

The figures present a stark contrast to global investment in fintech companies, which was found to be US $24.7 billion, down from US $46.7 billion in 2015.

However, the report also made clear that the total global funding figures are “still significant compared to pre-2015 investment levels”, indicating 2016 saw a particularly pointed spike for fintech investment, rather than a new normal.

Reduced M&A activity and private equity deals were said to be the main factor in the global decline, while venture capital investment remained strong, actually reaching a new high of US $13.6 billion, up from $12.7 billion in 2015.

“In just five years, Australia has seen the creation of a healthy and active fintech sector, from an extremely low base of just $51 million of fintech investment in

2012 to exceed $600m in 2016,” said Ian Pollari, global co-Leader of fintech at KPMG, commenting on the findings.

“While mega deals result in peaks and troughs in overall figures, the trend is clear and demonstrates increasing interest and investment activity in fintech.”

Digital Trumps Branch

Buried in the CBA results presentation today was a series of charts which shows just how far digital has come.  Just as predicted in our Quiet Revolution Report.

Yet, as banks focus on more younger, digital users, they see a decline in satisfaction from older, less digitally aligned households. See the change in Main Financial Institution (MFI) by age bands.

… and relative needs met by age.

Yet transaction migration is well underway. CBA showed the fall in branch deposits and withdrawals…

… and ATM transactions as cash becomes less critical compared with electronic transactions.

On the other hand, point of sale transactions have risen strongly …

… as well as internet transactions.

This is the killer slide – app use, cardless cash and tap and pay volumes are rising fast. Mobile first is here.

Yet they also reported an increase in sales from smaller but reconfigured branches, with home lending applications up 13%, and reducing broker originated volumes, and a 10x increase in branch leads and 95% contact rates leading to 3x higher conversion rates.

The new branch is smaller, more tech, and focuses on customer relationships.

But transformation of banking distribution has profound consequences, in terms of economics, profitability and customer satisfaction, and there is no doubt that digital will trump branch (just watch kids with their digital devices and how naturally they use them). It just depends on how long it takes.


Australian Banks Tell Apple – It’s About Access to NFC

The group of Australian banks applying to the Australian Competition and Consumer Commission (ACCC) for permission to jointly negotiate over access to Apple Pay and the Near Field Communication (NFC) function on iPhones, have announced they have narrowed the application to solely focus on open access to the NFC function.

In a joint statement on behalf of Bendigo and Adelaide Bank, the Commonwealth Bank of Australia, National Australia Bank, and Westpac, the banks said:

Open access to the NFC function on iPhone is required to enable real choice and real competition for consumers, and to facilitate innovation and investment in the digital wallets available to Australians.  Without open NFC access on iPhone, no genuine competition in the provision of mobile wallets is possible and Apple will have a stranglehold on this strategically important future market.

The four banks making the application – Bendigo and Adelaide Bank, Commonwealth Bank of Australia, National Australia Bank, and Westpac – have responded to concerns raised in the ACCC’s finely balanced draft determination, and proposed to remove from consideration items the ACCC considered may lead to a public detriment.

In the applicants’ response to the ACCC, the applicants have addressed these concerns by removing collective negotiation on the potential to pass-through the additional fees Apple wishes to impose on the payment system (i.e., the requested collective negotiation will be in relation to NFC access alone), and limiting the authorisation term to 18 months – half the original term sought.

Open NFC access would enable the delivery of substantial public benefits to Australian consumers, not just in payments, but across retailing, loyalty programs, building or member lounge security, and other NFC-use cases.  As a result, the applicants have again been supported by nearly all of Australia’s leading retailers, as well as competitors in the provision of payments services to merchants.

The applicants flatly reject Apple’s unsupported assertions that the application is about an objection to the fees that Apple wishes to impose, rather than NFC access.  Apple’s conspiracy theories about “Trojan horse fees” are similarly dismissed by the applicants as fantasy.

Apple recorded over $US7 billion in services revenue, which includes Apple Pay fees, from their customers in the last 3 months of 2016 alone, and hopes to double that over the next four years.  With their services business set to become the size of a standalone Fortune 100 company this year, Apple is the leading expert on deriving fee revenues from iPhone users, not the applicants.

“The applicants are ready, willing, and able to participate in Apple Pay, alongside being able to offer their customers their own mobile wallet products,” payments specialist and spokesperson on behalf of the applicants, Lance Blockley, said.

“This application has always been about consumer choice, and allowing competition between the makers of mobile wallets to offer the best products and features they can to determine which mobile wallet consumers will use.  The applicants want to put up their digital offerings head to head with Apple Pay, and let the market and individual consumers decide which best suits their needs.

“Open access to the NFC function, as occurs on the world’s most popular and widely installed mobile operating system Android, is important not just to the applicants and mobile payments, but to a range of NFC-powered functions across many sectors and uses.  This has global implications for the use of NFC on smart phones.

“The application seeks permission to jointly negotiate with Apple; this is not an attempt to delay Apple Pay from entering the Australian market.  The applicants expect that Apple Pay would be offered to their customers alongside open access to the NFC function.  Any delay or frustration will be as a result of Apple refusing to negotiate.

“Apple is not a bank or a credit card scheme, and Apple cannot on their own complete a mobile payment.  Nor are the applicants manufacturers of mobile phones – both parties need each other to bring strong mobile payment offerings to the market.”

The applicants look forward to the ACCC’s final decision, and believe their submission further demonstrates the net public benefits of the application, and substantially removes any risk of public detriment.

Digital Transformation Yet To Gain Ground

Research from McKinsey shows that despite all the hype surrounding digital transformation, there is a long way to go for many organisations, and the rate of transformation varies across industries. Yet already there is already profound economic fallout.

This finding confirms what many executives may already suspect: by reducing economic friction, digitization enables competition that pressures revenue and profit growth. Current levels of digitization have already taken out, on average, up to six points of annual revenue and 4.5 points of growth in earnings before interest and taxes (EBIT). And there’s more pressure ahead, our research suggests, as digital penetration deepens

At the current level of digitization, median companies, which secure three additional points of revenue and EBIT growth, do better than average ones, presumably because the long tail of companies hit hard by digitization pulls down the mean. But our survey results suggest that as digital increases economic pressure, all companies, no matter what their position on the performance curve may be, will be affected.

Which Tier 1 Banks are Leading in Digital Transformation?

New research from Juniper highlights the challenges and opportunities facing retail banks as digital migration moves fast, and branches become less relevant. “Mobile first” strategies are developing.

Juniper has analysed some of the leading Tier 1 banks from different parts of the world to evaluate their digital transformation readiness score and show their positioning to achieve the next level growth and digital innovation.

Juniper’s Readiness Index is designed to compare how these Tier 1 banks have scored based on the above mentioned target areas: relative placement of the banks in different phases does not necessarily mean that they are in anyway underperforming in terms of customers or revenue generation.

While most consumers, especially in developed markets, prefer digital banking and virtual channels, a significant proportion of consumers still prefer an in-branch session compared to an audio or video call with the customer contact centre. Juniper notes while this continued to be the case in the past 12 months, it will change as banks finalise a ‘balancing act’ between multiple channels.

This is more likely to be centred on the mobile device as banks move to a ‘mobile first’ approach, a trend supported by the scale of declining workforces and the number of physical branches, alongside increasing mobile usage across all markets.

Retail banks across the globe are struggling, with a report by the Bank of England in the UK highlighting that 30-40% of banks’ costs is concerned with running physical branches. However banks’ customers are not visiting their branches; in fact the report also found that footfall has fallen by 10% per annum.

This has been further confirmed by the decreasing number of branch visits by consumers and also the closure of physical bank branches over the past 12-24 months in other markets. In 2014, the number of US branches declined by 2% with only 2 banks amongst the top 12 (Wells Fargo and US Bancorp) increasing their branch numbers in that year.
The situation is rather different in emerging markets, such as China and India, where the number of physical banks is increasing in tandem with digital adoption. This is part of a wider trend in these markets to address a historic underdevelopment of physical banked infrastructure in rural areas and lower penetration of banked individuals. The growth in the banked population is particularly marked in India, rising from 30% of adults in 2010 to 48% by mid 2016. Nevertheless, even here, the focus is increasingly on digital expansion, especially in terms of digital wallets.

Banking and payments markets have witnessed an array of new methods of providing services. This means that banks and VCs (Venture Capitalists) are increasingly investing in technology to drive continued innovation.
Banks are investing in technology firms partnering, as well as acquiring, some of the tech-first players, alongside setting up technology hubs and development centres. In fact, as the chart below suggests VC investments in fintech start-ups reached record levels in 2015, almost $14 billion.

Meanwhile some of the more recent investment announcements by Tier 1 banks include:

  • In mid 2016, Deutsche Bank announced that it will invest €750 million ($790 million) in developing digital products and advisory services by2020; nearly €200 million ($211 million) is expected to have been invested in 2016.
  • In 2014, Spanish bank BBVA announced a $1.2 billion investment in technology projects in South America to boost its digital innovation in the market. Following that, in 2015, the bank invested $68 million in the UK-based challenger bank Atom for a 29.5% stake.
  • In 2015, Lloyds Bank first announced its plan to invest £1 billion ($1.2 billion) in digital banking capability over the next 3 years. Previously, in the UK, RBS had announced a similar level of investment into digital technology and services development. Australian bank Westpac meanwhile announced that it will increase its annual investment spend by 20% to $1.3 billion, the majority of which will be dedicated to technology, digital and simplification projects.
  • Indian bank SBI (State Bank of India) raised its IT budget in 2015 by a third to ₹4,000 crores ($580 million) as part of its strategy to improve its digital offerings. For the financial year ended March 2015, the bank had spent over ₹3,000 crore ($440 million) on technology.
  • In 2016, ING first announced its plan to invest €800 million ($845 million) in digital transformation initiatives over the next 5 years. Meanwhile, Emirates NBD announced Dh500 million ($136 million) investment over the next 3 years on digital innovation and the multichannel transformation of its processes, products and services.
  • Also in 2016, the Bank of Ireland announced its plans to invest €500 million ($588 million) in upgrades to its core IT infrastructures over the next 5 years.

Donald Trump could be about to end net neutrality

From The Conversation.

Donald Trump wants to build another wall. Not a physical wall to keep out illegal immigrants, like his proposed Mexican border project, but a virtual wall around the internet. And just as with Mexico, he wants the people behind the wall to pay for it.

President Trump seems to want to dismantle the main internet policy of his predecessor, that of ensuring net neutrality, also known as the “open internet”. To do this, he has appointed the most vocal Republican critic of President Obama’s internet policies, Ajit Pai, as chair of the Federal Communications Commission (FCC), the largest and most powerful internet regulatory body in the world.

Net neutrality is the principle that telecoms providers that connect you to the internet should not throttle your access depending on what services and content you use. For example, your mobile phone company should not be able to reduce your use of Skype or WhatsApp by reducing the speed of those services so that you use their calling and messaging functions instead. Without net neutrality, certain services and websites would be able to pay internet providers so that customers can access them with faster speeds, disadvantaging those companies without such a deal.

Telecoms providers’ attempts to do this led to a growing international consensus among governments on net neutrality. From 2009, many European and Latin American countries introduced regulations and laws to promote or guarantee net neutrality. In the US, opposition from big telecoms and cable corporations in the courts meant it took six years of Obama’s presidency to begin to effectively implement net neutrality rules.

To get around net neutrality rules, some telecoms companies have more recently begun using a “zero rating” approach of offering customers a preferential bundle of certain services that do not use up data allowances. These “sponsored data” plans don’t prevent access to any other site or service. But they still disadvantage smaller content providers, including the likes of the BBC and Wikipedia, that cannot afford to negotiate inclusion in sponsored data plans as the likes of Facebook and Google can.

Ending net neutrality could make some sites faster than others. Shutterstock

By the end of 2016, regulators in the EUand India had produced further guidelines banning zero-rating plans. And the FCC under Obama was challenging companies using the zero-rating strategy. All those other national regulators are in the midst of their investigations – which is why they are susceptible to the FCC’s do-nothing.

But, in the US at least, that is now history as we enter the Trump era. The new FCC chairman has argued the net neutrality rules over-regulate innovation, even quoting the Emperor from Star Wars to invoke his opposition. He prefers deregulation to allow companies to compete without explicit consumer protection rules to guarantee an open internet.

Since his appointment, Pai has closed the inquiry that was implementing Obama’s policy, and he is highly unlikely to agree to another one. Pai will most probably continue to act towards net neutrality by exercising masterly inactivity, failing to enforce the regulations.

Behind the wall

That will allow the big US telecoms and cable companies to erect paywalls around their content, giving customers free access to affiliated services but making them pay for rival content, especially high definition video. That means lower costs for video services affiliated to AT&T, Verizon and Comcast but higher costs for independent providers such as Netflix.

Who else is affected by an end to US net neutrality? In short, those innovators unable to strike a deal to get inside the telecoms and cable companies’ paywalls. Facebook’s deals with mobile operators have enabled it to offer zero-rated content in many countries. They may now hope the US approval for zero rating will help their arguments in India, Brazil and other huge developing markets. Google and and even NetFlix may be big enough to look after their interests, too.

But small innovators will have no guaranteed minimum service level to design new services. That could impact the development of the Internet of Things, 5G mobile networks and cloud computing services. Having to ask permission to run your service on the internet is a major issue for start-ups that are effectively three engineers in a garage (as Google and Facebook once were). And this may affect new companies’ decisions on where to start their innovations.

Author: Professor of Internet Law, University of Sussex

Apple claims banks want digital wallets as a new revenue source

From Australian Fintech.

Apple says three of the big four banks are pushing to pass the costs of Apple Pay on to their customers as a way to “condition the market” into paying extra fees when using a mobile phone to make a ‘tap and go’ payment.

One of the issues in the long-running battle between Apple and Commonwealth Bank of Australia, National Australia Bank, Westpac Banking Corp and Bendigo and Adelaide Bank is whether the banks can pass through to their customers the fee that Apple will require them to pay to use the iPhone infrastructure.

But Apple has described the argument as a “trojan horse”. In a submission published by the Australian Competition and Consumer Commission on Friday, Apple suggests this issue of fees, rather than the bank’s other demand for access to the iPhone’s communication antenna, is motivating the banks, who are all developing their own digital wallets to compete against Apple’s. Digital wallets allow mobile phones to be used to pay through contactless payment terminals.

“Put simply, the applicant banks have the means, notice and opportunity to disadvantage Apple Pay by pricing Apple Pay transactions above transactions made using their own proprietary issuer digital wallets to dissuade cardholders from using Apple Pay,” Apple said. The banks have an “incentive to charge fees to consumers for using Apple Pay to steer customers towards their proprietary payment apps”.

Once the market became accustomed to being charged for using Apple Pay instead of a card, Apple says the banks would be “setting a precedent for charging for mobile payments on other digital wallets, in the future, including the banks’ own proprietary wallets”. The banks could “tacitly extend the imposition of those fees to any digital wallet transaction as a new revenue source,” Apple added.

ANZ deal

ANZ Banking Group broke ranks with the other banks to offer Apple Pay last year; the fee ANZ is paying to Apple has not been confirmed but is understood to be a few cents per $100 of transactions. But ANZ is prevented by its contract with Apple from charging customers for using the service.

The banks’ final submission to the ACCC will be published this week, ahead of the regulator making a decision on the authorisation request, which is expected next month.

Apple said that if authorisation is granted, it will merely provide “cover” for the banks. “The incentive to compete away these fees at the retail level is reduced or removed if there is an ACCC authorised ability to impose Apple Pay transaction fees which provides shelter for their own fees,” Apple said.