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(Corrects number of banks supporting Android Pay to two from four in the third paragraph.)
By Matt Siegel and Swati Pandey
SYDNEY, April 28 (Reuters) - Apple Inc expanded its Apple Pay digital wallet in Australia on Thursday after ANZ became the country's first bank to support the mobile payment service, executives at the pair told Reuters.
Apple Pay allows users to register credit cards on devices such as iPhones, and pay for goods and services by swiping the devices over contactless payment terminals. Apple charges card providers for transactions via the service, which it introduced to Australia last year with American Express Co.
The latest partnership extends the service to ANZ customers and represents the culmination of months of talks with the bank and three bigger peers. Of the four, ANZ and Westpac Banking Corp have already agreed to support rival Android Pay from Alphabet Inc unit Google.
Collectively, the four account for 80 percent of all credit cards that consumers have linked to mobile payment systems, in a country with a relatively high rate of contactless payment.
The partnership also coincides with Apple's first-ever drop in iPhone sales during a quarter in which services such as apps, music and payment emerged as the firm's second-largest business.
"Our customers ... are much closer to being able to leave their wallets at home," Jennifer Bailey, vice president of Apple Pay, said in an interview.
Apple has partnered with a bank widely seen as trailing its three bigger peers in digital technology, a situation ANZ's new Chief Executive Shayne Elliott has set out to change with Apple Pay, as well as by hiring Google's Australia managing director.
"It would be pretty hypocritical of me to ... do all this hoo-ha about digital banking and then not be at the forefront of change," Elliott said in an interview.
Digital technology such as Apple Pay is making inroads in the financial industry, prompting traditional banks such as Commonwealth Bank of Australia, Westpac, National Australia Bank Ltd and Australia and New Zealand Banking Group Ltd (ANZ) to beef up digital services.
Over a quarter of banking revenue, or about A$27 billion ($20.82 billion), is at risk from "digital disruptors", consultancy KPMG recently estimated.
Apple has introduced Apple Pay to countries such as the United States and Britain where banks were also reluctant to sign up. It has since launched in China in February and in Singapore last week.
Apple continues to speak with other Australian banks, Bailey said, hoping ANZ customers' experience will create demand among competitors. (Reporting by Matt Siegel and Swati Pandey; Editing by Christopher Cushing)