Apple Pay and other digital payment systems could face a parliamentary inquiry amid fears a lack of competition may drive up fees and costs for consumers and even hurt people using dating apps.
The joint committee on corporations and financial services is considering its own investigation into the app payment sector even as the federal Treasury and the Australian Competition and Consumer Commission conduct studies into emerging fintech issues.
Digital payment systems such as Apple Pay may be the focus of a parliamentary inquiry over concerns about surcharges and competition.Credit:Josh Robenstone
It would follow the Morrison government’s news media bargaining code aimed at encouraging big technology companies to strike payment deals with media providers.
The payments system is undergoing substantial change, not only from digital payments but also from the buy now, pay later sector, which is based largely on breakthroughs in payment technology.
Research this week from the Reserve Bank showed payments through companies such as Afterpay had increased more than 500 per cent between 2016-17 and 2019-20.
The changes in digital payment systems have prompted fears about the power of both Apple and Google as they dominate the sector.
Liberal senator Andrew Bragg, a member of the corporations committee, said there might be a case for an inquiry into digital payments, depending on whether it covered different ground to the Treasury and ACCC investigations.
He said there were legitimate causes for concern in having digital payments dominated by two companies in Apple and Google.
“Big tech has enormous power already and we don’t want them to own the payments system,” he said. “We want to see innovation and competition but not if it’s just between Google and Apple.
“We have to ensure there is competition in the sector, not just monopoly players that allow them to increase fees and costs.”
In a submission to the Treasury’s inquiry into the nation’s payment system, the Match Group – which provides dating apps such as Tinder, Hinge and Plentyoffish – raised concerns about the online payment system process.
The company said Australian law should promote in-app payment systems for all app developers rather than being tied to those offered through Apple or Google.
It said between 60 and 80 per cent of its Tinder clients used Match’s own payment option but this would become unavailable after September.
“Match believes that consumers turn to Match’s payment solution for a number of reasons, including that they would like to ensure their activity and related data on Match’s platforms is not shared more broadly or combined with their other personal information by Google (for example, Google search data),” the company’s head of global government relations, Mark Buse, said.
“For some individuals, particularly in certain cultures, the mere use of a dating app can be sensitive information which consumers wish to keep guarded from potential exploitation.”
In some cases, app developers can hit fees of up to 30 per cent of transactions.
Google has defended the fee structure around its payment system, saying it allowed the company to develop and maintain its Play payment app.
“It is therefore not commensurate to compare the service fee we charge with the fees charged by fintechs that might offer to simply facilitate a payment transaction,” it said.
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