Frode Lervik, financial services expert, is quoted in an article in PaymentsCompliance about how Apple Pay’s launch in Norway has caught the attention of the country’s competition watchdog, as debate heats up over its restrictions on iPhones’ contactless payment technology.
The technology giant launched its payments application in June, weeks after competition and financial regulators approved the merger of Vipps, BankID and BankAxept — three major payment systems controlled by the local banks.
The arrival of Apple Pay in Norway has been eagerly anticipated, not least because of the major decision on the merger involving Vipps — a peer-to-peer payment service owned by 100 of Norway’s banks that has become a dominant player in the Norwegian market.
Its approval has paved the way to integrate the mobile application with the national identity scheme, BankID, as well as BankAxept, a rival card scheme to Visa and Mastercard.
The expectation that the merged company would face tough competition from global technology companies, including Apple and its rival Samsung, was an influential factor in the decision to agree to the deal.
Frode pointed out that one of the conditions for the merger was that the BankAxept scheme is kept open to other parties on fair competitive terms and conditions.
“If Apple manages to gain a dominant market position, something similar could be envisioned,” said Lervik. “However, I'm sure Apple would not take that lightly. It’s very likely that it would seek to challenge such a ruling.”
Currently, Nordea Bank and Santander are offering Apple Pay to their Norwegian customers, with Sparebanken Vest expected to launch services soon. But Norway’s biggest bank DNB, which used to wholly own Vipps before it was spun off as its own legal entity, is not offering Apple Pay to its customers as it would rather focus on its own mobile payment efforts.
For Lervik, there is also a question of how long the banks that are currently not part of the first Apple Pay “cohort” will maintain that position.
“If Apple Pay should get massive positive response and reviews, it's likely that more banks will see it as necessary to join as well,” he said. “However, this depends on a number of factors, so it remains to be seen.”
Read the full article here.