Apple sued over Apple Pay, faces antitrust accusations

Apple Inc. has been hit with an antitrust lawsuit over Apple Pay, accused of using its market power in the mobile device industry to fend off competition from other payment card issuers and charging them fees to boost its bottom line.

The proposed class-action complaint by Affinity Credit Union marks the latest antitrust battle for the iPhone maker, after facing increased scrutiny in recent years over its App Store policies from government regulators. European regulators also found on a preliminary basis that Apple abused its dominant position with Apple Pay.

Apple bars competitors from accessing the near-field communication interface from working with the technology giant's devices and “charges payment card issuers fees that no other mobile wallet ventures to impose,” Affinity, the Des Moines, Iowa-based credit union that issues payment cards, said in the lawsuit, filed Monday in federal court in San Jose, California.

Apple charges issuers 0.15% on credit card transactions and 0.05% on debit cards. Google Pay and Samsung Pay, operating on the Android system, don't charge card issuers any fees. The Apple Pay fees “generated a reported $1 billion for Apple in 2019, and this revenue stream — earned from card issuers — is predicted to quadruple by 2023,” Affinity Credit Union said in it suit.

Apple didn't immediately respond to a request for comment.

Current iPhone users must use Apple Pay if they want to buy something by tapping their devices. Other iPhone payment apps such as PayPal and Square — as well as financial institutions such as Chase, Citi and American Express — can't launch tap-to-pay iPhone apps with their own features and interface.