Australias big four banks are fiercely protecting their share of the nations payments market as multinational tech company Apple tries to launch its Apple Pay service Down Under.Theres a report in The AFR this morning that negotiations have slowed between the banks and Apple after the institutions proved unwilling to give up a portion of the $2 billion a year they earn from merchants for interchange fees.Apple earns about 15 cents for every $100 of transactions in the US and the AFR reports the tech company is looking for a similar deal in Australia. In the UK, where Apple Pay launched last month, the banks negotiated a deal where Apple receives a few pence for every 100 transaction.Currently the big four on average earn about 50 cents for every $100 worth of transactions. About half of whats earned in the US where its about $1 for every $100 of transactions.CBA boss Ian Narev says the functionality associated with Apple Pay has been available in Australia up to two years and the nations banking sector is ahead of a lot of the other markets around the world where Apple has done well.Narev recognised payments is a space which is being disrupted by tech and the saturation of mobile.If it not Apple, it might be Google; if it is not Google, it might be Samsung; if it is not Samsung, it might be Amazon; if is it not Amazon, it is going to be someone else, he said.Are we going to be able to sit here today and pick the major winners' No. But the disruption is structural. It is only going one way. And I dont think there will ever be a point where me or my successor, or his or her successor, is ever going to sit here and say their war is done and we won. This level of innovation is here to stay.But we have got customers, we have got distribution, we have got brand, we have got product. So as long as we are adding to that investment and have the right execution focus, we should be able to be really competitive.Both CBA and Westpac have similar products to Apple Pay. Customers can use their phones at tap-and-go terminals if theyve got the banks apps set up.Apple Pay launched in the US last October. It allows users to use their phone or Apple Watch to make a transaction but for it to work in Australia the tech company will need to make a deal with the banks to use the payments system.With payments players like Tyro entering the Australian market, the Reserve Bank is closely looking at interchange fees and has voiced it would like to see them lowered to around 30 cents for every $100.While there is a report the NAB is the closest to striking a deal with Apple Pay, Fairfax reports its more likely a smaller bank will be the first to move on an Apple deal. It would also enable them to target iPhone users for marketshare in the payments space.Theres more here.Join the conversation about this storyNOW WATCH: Here's what Pebble's new watch 'Time Steel' looks like out of the box Click here to read full news..