Zip accuses banks of anti-competitive behaviour, RBA eyeing Apple

James EyersSenior Reporter

Jul 26, 2021 – 4.00pm

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Australia’s banks and US tech giant Apple have. separately been accused of potentially anti-competitive behaviour, with Zip fingering banks for forcing the closure of buy now, pay later accounts before approving mortgages and the Reserve Bank raising concerns about Apple’s limits on access to its iPhone payments wallet.

In provocative testimony to a joint parliamentary committee investigating the rise of digital wallets, Zip co-founder Peter Gray said the most common cause of Zip account closures was a demand from a bank before agreeing to write a mortgage. Committee chairman Andrew Wallace said the conduct sounded like a form of “third-line forcing”.

Zip co-founder Peter Gray accused banks of forcing the closure of buy now, pay later accounts before approving mortgages. Louise Kennerley

Banks assessed buy now, pay later accounts in “a negative light”, Mr Gray said, adding: “I can confirm to the committee the No. 1 reason for customers closing their Zip account is the bank has told them they need to, to proceed with the mortgage.”

But the average Zip customer had a higher credit score than those seeking bank finance, and forcing buy now, pay later accounts to be closed was more likely motivated by “the level of engagement our service has with customers” and Zip representing “a competitive threat”, Mr Gray said. He suggested banks were using their market power to cross-sell the mortgage customer a more expensive credit product.

“It is potentially one for the banks to answer, but are they instructing their customers to close buy now, pay later accounts to have a mortgage settled and then offering them a credit card in lieu of them closing that account?” he asked the committee.