While Apple battles a group of large Australian banks over terms of its mobile payments app, it has entered separate deals with ING Direct and Macquarie.

ING and Macquarie join about a dozen banks, credit unions and U.S. card brands in supporting Apple Pay in Australia, Apple has announced. But Apple has still struggled to win the support of the country's largest Australian-based banks, which are petitioning the government to allow collective bargaining in negotiations on Apple Pay's terms.

Besides ING and Macquarie, Apple has the support of dozens of financial institutions in Australia — 38 banks and credit unions as of the end of 2016. The four large banks still challenging Apple are Bendigo and Adelaide Bank, Commonwealth Bank of Australia, National Australia and Westpac.

Bloomberg News
Bloomberg News

The larger banks say they do not want to negotiate on fees, but want Apple to open its Near Field Communication technology to support contactless pay in stores. The government has issued a preliminary ruling against the banks, but is expected to issue a final ruling early next month.

A win for the large banks could have major impact. Apple could be compelled to open its NFC technology to banks and merchants in other markets, and the large Australian banks could seek to collectively bargain on other issues.

Apple's approach in Australia is little different from what the U.S. carriers implemented. To execute transactions, Apple places encrypted payment credentials on the iPhone, and does not provide access to other mobile contactless payment providers, creating a closed system. The Australian banks want Apple to be more open, enabling other apps to work alongside Apple Pay on smartphones.

"By locking out any independent access to the NFC function on iOS devices, apple is seeking for itself the exclusive use of Australia's existing NFC terminal infrastructure for the making of integrated mobile payments using iOS devices," said Lance Blockley, a spokesperson for the four banks in the Australian/Apple dispute, earlier this month. "Yet this infrastructure was built and paid for by the Australian banks and merchants for the benefit of all Australians."

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