Legal Challenge Against Apple Pay’s Dominance in Contactless Payments on iPhones


Worldwide, some financial institutions that issue credit and debit cards are expressing discontent with Apple Pay, and a lawsuit has begun to surface, targeting Apple Inc. as the focal point of a controversy. We dive into the escalating tension encapsulating Apple’s payment platform, Apple Pay.

Behind the Conflict

The Iowa-based Affinity Credit Union, which provides cards accepted by Apple Pay, has resolved to disrupt what it perceives to be an unwarranted monopoly by Apple on the contactless payment technology on iPhones. Affinity’s legal challenge claims that Apple generates in excess of $1 billion per year by imposing fees on credit card providers within Apple Pay, costing up to 0.15 percent per card transaction.

The legal action, pursued by the prominent firm Hagens Berman, accuses Apple of antitrust violations by insisting that NFC (Near-Field Communication) transactions on Apple devices, such as iPhones, iPads, and Apple Watches, can only be processed through Apple Pay. Hagens Berman’s press statement highlighted that competing Android-based wallets do not subject card issuers to these fees.

The litigation further criticizes Apple for preventing card issuers from transferring these costs to customers, effectively undermining the motivation to seek out more cost-effective NFC payment options, especially for those with iPhones.

Apple Pay _ tap-to-pay feature

The lawsuit filed by Affinity Credit Union could be a significant move against Apple Pay’s dominance in NFC mobile payments for iPhone users. (Image Courtesy: Apple Newsroom)

The Implications

The adoption of NFC payments surged recently, partly propelled by the pandemic, and digital wallets have found their place in everyday transactions. Affinity Credit Union’s bold action against Apple’s dominance reflects deep-seated concerns that this legal battle seeks to address.

The Future of Apple Pay

Complicating matters for Apple, Hagens Berman has submitted a request for the lawsuit to attain class-action status, marking their third legal confrontation with the tech giant. Previously, the law firm has secured settlements for developers and consumers in suits alleging unfair practices in the App Store and eBook pricing. These precedents are alarming signs for Apple’s future dealings with lawsuits.

“Apple Gets Sued by E.U.” became another trending topic in the news, with the European Union scrutinizing Apple Pay’s exclusivity and restricting third-party access to the iPhone’s NFC capabilities, raising concerns about stifled innovation and limited consumer choices. The stakes are high for Apple Pay as the tech community awaits the outcome of the case, which could deliver a serious setback to Apple’s position in the mobile payment market.

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