DES MOINES, Iowa–Affinity Credit Union has filed a proposed class action lawsuit against Apple alleging the company is illegally profiting from Apple Pay by limiting users’ ability to use similar tap-to-pay options.
Apple’s actions violate anti-trust laws, the $137-million credit union is alleging.
According to the lawsuit, which was filed on behalf of payment card issuers, Apple’s “monopoly” on tap-to-pay methods for iPhone users combined with the charges card issuers must pay constitutes anti-competitive behavior, WeAreIowa.com first reported.
Apple Pay charges card issuers a .15% fee for credit transactions and .005 cents on debit transactions, the publication stated. Other apps are allegedly unserviceable for iPhone users due to Apple’s restriction on accessing iOS' Near Field Communication, or NFC, the report added.
Apple Vs. Android
"Facing competition in the Tap and Pay iOS Mobile Wallet Market, Apple would not be able to sustain its credit or debit transaction fees," the lawsuit reads, according to WeAreIowa.com. "The Android tap and pay mobile market is case in point. There, NFC technology is open to all comers, and Google Pay and Samsung Pay compete to provide tap and pay solutions. In this more competitive market, neither Google Pay nor Samsung Pay charge issuers a fee."
The lawsuit goes on to state, "Google, the owner of Android, does not restrict access to NFC technology on Android devices—it is available for use to all comers, including digital wallets that compete with Google’s digital wallet, Google Pay. In contrast to the Android ecosystem, there is only one tap and pay mobile wallet that can be used on Apple’s iOS devices ... The only option is Apple Pay, Apple’s own proprietary service."
Additional Allegations
WeAreIowa.com went on to further report the lawsuit contends that iPhones are capable of downloading other tap-to-pay methods, but they are not permitted to actually use them, making Apple Pay the only choice for users wanting to complete a contactless transaction.
“The lawsuit alleges that, ‘If either of these solutions (or others) were permitted to access the NFC interface on iOS, they would attract issuers and users and pose a competitive threat to Apple Pay’,” WeAreIowa.com added.
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