Apple Pay is attracting yet more negative attention

Apple Pay under fire once more

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A lawsuit has been launched againstAppleover the management of its popularmobile paymentswallet, Apple Pay.

Filed by Affinity Credit Union on behalf of itself and “all similarly situated payment card issuers”,the complaintalleges that Apple “coerces” iPhone users into adopting its own contactlesspaymentssolution.

“Apple’s conduct harms not only issuers, but also consumers and competitions as a whole,” the document asserts.

Apple Pay under the spotlight

Unlike popular Android-based payments wallets likeGooglePay andSamsungPay, Apple charges card issuers a 0.15% fee for eachcredit card transactionand a 0.5c fee on each debit card purchase made via Apple Pay.

According to Affinity Credit Union, the company’s unwillingness to allow alternative wallets onto its iOS platform leads thousands of banks and credit unions to pay upwards of $1 billion in additional fees each year.

Further, the plaintiff has asserted that the lack of viable Apple Pay alternatives on iOS has ultimately disincentivized product innovation, leading to adverse effects for end users too.

“As a result of Apple’s exclusionary conduct, Plaintiff and other issuers pay, and have paid, fees they would not have incurred in a competitive market. But that is not the extent of the harm,” the filing states.

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“If there were multiple Tap and Pay iOS Mobile Wallets, the competing firms would need to innovate to differentiate their offerings, for example by improving the security of transactions. Consumers and issuers have been deprived of that innovation.”

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The filing goes on to demand a halt to the anticompetitive practices detailed in the complaint, in addition to as yet unspecified damages.

However, the lawsuit is just the latest development in the debate over Apple’s behavior in the sector. The EU, for example, is currently investigating whether Apple can be said to have abused its dominant position in hardware and mobileoperating systemsto unfairly benefit its position in payments.

If the regulators come to that conclusion, Apple could be on the hook for as much as 10% of its global turnover, although the maximum penalty is unlikely to be handed out.

TechRadar Prohas asked Apple for comment on the latest lawsuit.

Joel Khalili is the News and Features Editor at TechRadar Pro, covering cybersecurity, data privacy, cloud, AI, blockchain, internet infrastructure, 5G, data storage and computing. He’s responsible for curating our news content, as well as commissioning and producing features on the technologies that are transforming the way the world does business.

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