When making purchases online, it is common for people to pay with credit cards or use platforms like PayPal. For physical purchases, there is an increasing use of mobile payment services like Google Pay and Apple Pay. Recently, Apple, along with Visa and Mastercard, has faced an antitrust lawsuit accusing them of collaborating to establish market dominance and causing higher fees by making Apple Pay the only option.
NFC technology in mobile phones allows for easy and quick payments, making it an increasingly preferred payment option, as there is no need to carry a credit card. Google Pay, formerly known as Pay with Google, launched over a decade ago for Android devices.
Apple Pay was introduced a few years later to compete with Google and offer a similar service on Apple devices. Apple claimed to provide greater payment protection and security without storing any user data or purchase information. However, Apple, Visa, and Mastercard have been sued by Mirage Wine & Spirits, an Illinois-based beverage company.
Mirage Wine & Spirits alleges that Apple made an agreement with Visa and Mastercard to eliminate competition. They claim the companies collaborated to prevent rivals with NFC payment capabilities and stopped other businesses from using third-party apps with the “tap-to-pay” iPhone function. So, the only available option was Apple Pay.
Apple Pay being the sole payment method contributed to an increase in fees for merchants. The class-action lawsuit alleges that Apple accepted a substantial bribe from both Visa and Mastercard in exchange for not competing against them. The bribe involved a certain percentage of transaction fees from both companies for payments with credit and debit cards using Apple Pay.
As this unfolds in America, Apple may open its NFC technology in Europe to avoid antitrust lawsuits. Apple is under investigation by the European Commission, with over 2,500 banks using Apple Pay, and allegations that the company restricted third-party customer access.
In summary, Apple, Visa, and Mastercard face an antitrust lawsuit over increased fees associated with using Apple Pay, as they are accused of working together to establish market dominance and making Apple Pay the only option for mobile payments.