Affinity Credit Union sues Apple over Apple Pay functionality | Iowa

A class action lawsuit filed by Affinity Credit Union accuses Apple of illegally profiting from Apple Pay by limiting users’ ability to use other payment options.

IOWA, USA — An Iowa credit union is suing Apple for violating antitrust laws over the company’s Apple Pay feature.

A class action lawsuit brought by Affinity Credit Union in Iowa accuses Apple of illegally profiting from the software by limiting iPhone users’ ability to use other push-to-pay features on Monday.

According to the lawsuit, which was filed on behalf of payment card issuers, Apple’s “monopoly” on contactless payment methods for iPhone users combined with the fees card issuers have to pay constitutes conduct anti-competitive.

Apple Pay charges card issuers a fee of 0.15% for credit transactions and 0.5 cents for debit transactions.

Other apps would be unusable for iPhone users due to Apple’s restriction on access to iOS’s Near Field Communication, or NFC.

“Faced with competition in the iOS Tap and Pay mobile wallet market, Apple would not be able to sustain its credit or debit transaction fees,” the lawsuit states. “The Android mobile tap and pay market is an example. There, NFC technology is open to everyone, and Google Pay and Samsung Pay compete to provide tap and pay solutions. In this more competitive market, neither Google Pay nor Samsung Pay does not charge issuers a fee.”

“Google, the owner of Android, does not restrict access to NFC technology on Android devices. It is available to all users, including digital wallets that compete with Google’s digital wallet, Google Pay,” continues the trial. “Unlike 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 .”

The lawsuit argues that iPhones are capable of Download other contactless payment methods, but they are not allowed to use them, making Apple Pay the only choice for users wishing to complete a contactless transaction.

The lawsuit alleges that “if any of these solutions (or others) were allowed to access the NFC interface on iOS, they would attract issuers and users and pose a competitive threat to Apple Pay.”

Fees for card issuers have earned Apple up to $1 billion a year, the lawsuit alleges.

Apple is facing a similar lawsuit in the European Union for denying third-party app developers access to use the iOS NFC interface, ruling out competition for pay-per-touch methods. Apple has denied all allegations in the EU lawsuit.

Local 5 has contacted Apple regarding the Affinity Credit Union lawsuit and will update this story as more information becomes available.

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