How popular will Apple Pay's Australian Amex tie-up be?

Apple’s decision to make its digital wallet, Apple Pay, available in Australia only to American Express customers represents a challenge to local adoption of the service, according to Telsyte managing director Foad Fadaghi.

He said the deal is in contrast to the US where a number of banks have jumped on board with the service.

Apple CEO Tim Cook revealed last month that the service would be rolled out to Australia.

The contactless payment service, which uses Near Field Communication, is compatible with a range of iOS-based devices, including the iPhone 6 and a number of iPad models, as well as the watchOS-based Apple Watch.

“The technology enhances contactless payments both instore and also using Apple devices. There is a very large base of Apple users that will be possibly disappointed if they don’t have an Amex card,” Fadaghi said.

“Even then, I think a lot of Amex customers might have other cards. A lot of utility comes from storing all of your cards in that [digital] wallet.”

Fadaghi said the Amex relationship is based on a global partnership and is a good way for Apple to answer the digital wallet market.

“It’s a question of whether or not the local banks think Apple is trying to muscle in on their turf. It [Apple Pay] will show up the weaknesses of the major banks including some of the security aspects.”

If Visa or MasterCard come on board with Apple Pay, there might be some serious challenges for Apple to launch more widespread, added Fadaghi.

Apple Pay went live in Australia today.

This morning the Commonwealth Bank announced it would expand its Tap & Pay digital wallet service.

CBA customers can now make Amex and MasterCard credit card purchases at POS terminals using Tap & Pay if they have an Android phone with NFC or an iPhone PayTag solution.

According to CommBank, it is the first Australian bank to roll out American Express payments on all Android devices.

The bank launched Tap & Pay for MasterCard debit card purchases on Android phones in March this year.

Since then, more than 300,000 cards have been set up on the CommBank app and 1 million transactions have been processed.