National Australia Bank seeks to fight off Apple Pay with new app

National Australia Bank's digital wallet application, which is available to customers from today, is the first such wallet with certain security features offered by an Australian bank, putting it in competition with Apple Pay for a share of the reported AUD 2.5bn ($1.74bn) in fees for credit card transactions. The mobile banking service, which is being offered in partnership with Visa, is another in a string of initiatives offered by banks in roder to avoid losing fees to Apple Pay, Android Pay, and Samsung Pay, which have an increasing presence in Western markets.

NAB's first digital wallet out on Monday is backed by Visa, making it the first Australian bank to use a new mobile security system that fights Apple's bid for a share of the $2.5 billion in fees for credit card transactions.

NAB's new digital wallet, NAB Pay, will allow customers to use an Android smartphone or other mobile device to make payments via the NAB mobile app with a virtual Visa card. It will later allow credit cards to be used as well.

NAB will be the first to use the credit card companies' new token vaults for mobile device payments. Credit: Louie Douvis

Most of the banks, including Commonwealth, Westpac and numerous regional banks and mutual lenders, already offer similar wallets, but NAB's is the first to use Visa's new Visa Tokenisation Service as the mobile security platform.

The banks and credit cards are resisting a push by Apple to take 15c in every $100 worth of interchange fees in returning for issuing Visa or MasterCard on Apple Pay. It is understood banks in the US and Britain are already paying part of their fees to Apple.