US banks invited to join Apple Pay class lawsuit

A federal judge has cleared the way for U.S. banks and credit unions to join a class-action lawsuit against Apple. The case centers on Apple’s historical practice of charging card issuers fees to use Apple Pay while blocking third-party mobile wallets from accessing the iPhone’s NFC chip. For retailers and merchant operators, this signals a potential shift in the mobile payments landscape. If the lawsuit succeeds, it could lead to lower transaction costs for issuers, which may eventually trickle down to merchant processing fees. More importantly, it could force Apple to open the iPhone’s hardware to competing payment apps. Currently, Apple Pay is the only way for iPhone users to make tap-to-pay purchases. If other wallets—like those from banks or alternative financing providers—gain access to this technology, merchants could offer a wider variety of branded financing options directly at the point of sale without going through the Apple ecosystem. This litigation mirrors similar regulatory pressure in the European Union, where Apple has already begun opening its NFC technology to rivals. For now, merchants should watch this closely as a win for the banks would likely increase competition in the digital wallet space, potentially lowering the 'Apple tax' on digital transactions.

Source: Finextra — Lending

← Return to the library· Submit a correction