Australia is tipped as one of the next markets where Apple Pay will launch, but the US company must find common ground on how to share fees with the country’s banks, said The Sydney Morning Herald.

Apple is pushing for a greater share of the so-called interchange fees, which are paid by merchants, than the Australian banks are prepared to give up.

The US company is pushing for the same amount from interchange fees in Australia as it receives in the US, yet such fees are about half the level in Australia, and the Reserve Bank of Australia wants to see them at an even lower level. This puts a distance between Apple and the banks in the negotiations.

Commonwealth Bank of Australia chief executive Ian Narev would not comment on the negotiations with Apple, but talked up local banks’ innovative qualities.

“By most global standards, the capability that the Australian banking sector has generally, and Commonwealth Bank has specifically, to provide for customers is ahead of a lot of the other markets around the world where Apple has done well,” Mr Narev said last week after the company’s results meeting.

“There is functionality associated with Apple Pay that we have had in the market for 18 months to two years,”  he said, referring to NFC-based mobile payments.

Both Commonwealth Bank and Westpac already offer NFC-based payment through their banking apps.

After the US in October last year, and the UK in July, Australia was viewed as a strong contender for the next launch for Apple Pay, not least because of the country’s relatively strong contactless card payment base (although NFC-based payments by mobile devices have found it harder to make an impression).

National Australia Bank is thought to be closest to securing an agreement with Apple. However it’s possible the first partner will actually be a small bank who might strike a high-profile deal in the hope of benefiting its wider business.

There are two other reasons why the banks are holding back. Firstly, they are under pressure by the Reserve Bank to invest heavily in the so-called New Payments Platform, which is intended to have real-time capability. They are not keen to see Apple get a free ride on this new infrastructure.

Secondly, the banks are nervous about Apple having too much access to their customers at the point-of-sale, enabling them to cross sell services and gathering useful data about users.