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MasterCard Takes a Swing at Australian Regulators on AMEX and Apple Pay Deal

December 9, 2024         By: Asif Imtiaz

MasterCard alleged that the deal between American Express and Apple to introduce Apple Pay outside of the United States and United Kingdom shows a regulatory failure and double standard regarding American Express.

According to MasterCard, the fees of Visa and MasterCard are being capped, while American Express is getting a free pass.

Expressing his concerns, the Divisional President of MasterCard Australasia, Eddie Grobler, told the Sydney Morning Herald that “Regulation of American Express companion cards is a small step in the right direction but it leaves enormous regulatory holes that mean retailers and businesses, and consumers will continue to see distorted costs for payments schemes, including American Express [proprietary], China Union Pay and PayPal.”

According to him, the Apple Pay launch includes American Express proprietary cards, which demonstrate the double standard of regulators because it will allow a much higher fee for merchants compared to what regulators are allowing MasterCard and Visa to charge. This higher charge will enable American Express to enjoy better margins.

“[The situation] goes to the very heart of this challenge and shows the unintended consequences of regulation in Australia,” he said to an Australian media outlet. “The result is that the highest cost card for retailers and businesses to accept is able to incentivize consumers and benefit from the work of MasterCard and Visa, who along with our acquiring customers invested in the contactless infrastructure necessary for the unregulated proprietary Amex to grow,” he added.

However, a spokesperson from American Express denied the allegation by saying that “Apple Pay is available to every issuer in Australia.” Hence, “all issuers have a choice,” she said.

Currently, American Express is able to charge a 1.7% fee to merchants in Australia, where MasterCard and Visa have to cap their fees to around 0.5% over the next here years due to regulations.