FILE PHOTO: An Apple iPhone 6 with Apple Pay is shown in this photo illustration in Encinitas, California
SYDNEY (Reuters) - Australia's competition regulator on Friday said it would bar a group of the country's largest banks from bargaining collectively for access to Apple Inc's contactless payment function, potentially setting a global precedent.
The decision, the first of its kind, will stop the banks from introducing their own mobile applications on devices like the iPhone and Apple Watch that could be used for contactless payments instead of the Apple Wallet.
That would have enabled banks to circumvent transaction fees and get customers to engage more frequently with their own apps, potentially unlocking more of Australia's contactless payment market.
"While the ACCC accepts that the opportunity for the banks to collectively negotiate and boycott would place them in a better bargaining position with Apple, the benefits would be outweighed by detriments," Australian Competition and Consumer Commission (ACCC) Chairman Rod Sims said in a statement.
A representative for the banks said they were "disappointed" by the ACCC decision and would individually review their future strategies for mobile wallets and payments to best serve their customers.
Apple was not immediately available for comment.
Commonwealth Bank of Australia, Westpac Banking Corp, National Australia Bank Ltd and Bendigo & Adelaide Bank Ltd command two-thirds of Australia's credit-card market but have yet to allow use of their cards with Apple Pay, which was introduced to the country last year.
Payments consultant MWE Consulting last year estimated the "tap and go" market at A$110 billion ($84.32 billion) a year and growing, although to date more transactions are with contactless cards than mobile phones.
(Reporting by Jamie Freed, editing by G Crosse and Diane Craft)