Apple Pay growth will make it the next antitrust fight with regulators

Posted:
in iPhone
Apple Pay use has grown significantly since the pandemic began, and regulators are taking note as antitrust probes have already begun.

Apple Pay will be Apple's next regulatory battle
Apple Pay will be Apple's next regulatory battle


Apple Pay works on all Apple products via biometrics or a password and can be used in apps and on the web. Between Apple Card and Apple Pay Cash, users are significantly motivated to utilize Apple's payment platform when using Apple devices.

The largest issue at hand is how Apple presents users with the payment system and how other payment products are minimized on its platform. The Wallet app cannot be deleted and payment apps cannot have access to the NFC chip on the iPhone. This means when the iPhone or Apple Watch is presented to a payment terminal, the Wallet app will always appear.

On top of those restrictions, Apple also has guidelines for developers that minimize other payment options. These guidelines range from "make the Apple Pay button larger" to "make Apple Pay appear separate from other options."

Regulatory pressure started in late 2019 as the EU opened an investigation into Apple Pay. Other regulatory bodies have taken interest since, especially due to the pandemic causing an explosion in contactless payment options.

A report from Financial Times says that Apple could leverage Apple Pay to make it earn even more than the App Store in the future.

Apple's head of Apple Pay, Jennifer Bailey, said that contactless payments have gone from "being a convenience to a matter of public health." Estimates from analyst group Loup Ventures show Apple Pay is used by at least 507 million people, up from 67 million in 2016.

Apple takes an estimated 0.15% fee per transaction, and analysts estimate that it would facilitate one in ten transactions worldwide by 2025.

Apple's stance on the matter is clear--the company believes if it opens up its NFC chip to other payment options it exposes users to security risks. Apple is also not the dominant mobile platform around the world, nor is its payment system. China is one of Apple's biggest markets, yet most of the people rely on WeChat Pay and Alipay.
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Comments

  • Reply 1 of 41
    I don’t understand the issue. You wouldn’t sue Walmart because they didn’t have big enough “Shop at Target” signs.
    jas99chaickaBeats
  • Reply 2 of 41
    lkrupplkrupp Posts: 9,472member
    If anybody is going to fuck up the internet it will be the government. Why Apple Pay? As the article points out Apple is in no way the dominant mobile platform in terns of contactless payments. And if a user is unhappy that Apple does not allow other NFC payment systems that user can switch to THE dominant platform, namely Android.

    I have never bought the claim that Apple is a monopoly within itself. That POS computer company Psystar claimed that Apple had a monopoly on Macs. That kind of thinking is about as stupid as it gets.
    jas99chaickadavgregwilliamlondonNotoriousDEVentropys
  • Reply 3 of 41
    While regulatory oversight is good - I don’t see any issues with Apple Pay, in much the same way that my credit cards don’t have a monopoly on my wallet space. 

    Convenience and user interest are not grounds to establish monopoly. 
    chaicka
  • Reply 4 of 41
    Unfair and Biased.

    What about Google Pay on Android phones and Samsung Pay on Samsung phones?

    Just because they ain’t as big as Apple Pay?

    Regulatory are no longer about regulating but more of a political machine and monetary generating machine.
    lkruppNotoriousDEV
  • Reply 5 of 41
    flydogflydog Posts: 1,005member
    igforbes said:
    I don’t understand the issue. You wouldn’t sue Walmart because they didn’t have big enough “Shop at Target” signs.
    There is no issue.  All of these antitrust arguments are predicating on narrowing the relevant market to a single product, and then arguing that the company offering that product has a monopoly over its own product.  

    Clearly people can choose to pay with cash, check, or any credit card. And when using a credit card they may use any contactless system accepted by the merchant. The fact that most people who use a contactless system choose Apple Pay because offers the easiest to use and most secure solution does not transform it into a monopoly. 

    Plenty of other companies tried and failed to offer a competing product, and they failed not because Apple has a monopoly, but because their offerings sucked.  For example:

    https://www.forbes.com/sites/markrogowsky/2015/12/10/walmart-drops-an-atomic-bomb-on-its-applepay-competitor/?sh=7d265c3e26a4


    williamlondonpujones1BeatsStrangeDays
  • Reply 6 of 41
    mjtomlinmjtomlin Posts: 2,446member
    What's next? Apple will have to allow other platforms to replace iOS on the iPhone? Sorry, but as the maker of the physical device, Apple should be able to determine what part of the hardware is and is not open for 3rd party access.

    It would be one thing if Apple's hardware had a monopoly, but it doesn't. But even then, there are still many other ways for people to make a payment. It is not Apple's fault that the banks in the US dragged their feet for so long in bringing contactless payments to the market. Other countries have had tap-to-pay for a decade now - no smartphone required.
    lkrupp
  • Reply 7 of 41
    igforbes said:
    I don’t understand the issue. You wouldn’t sue Walmart because they didn’t have big enough “Shop at Target” signs.
    And I don't see anyone suing them for having Walmart Pay as the only option for contactless payment.  Though if any of these idiots are successful against Apple, there will be such suits against Walmart.  At least one, anyway.
    pujones1
  • Reply 8 of 41
    mjtomlin said:
    What's next? Apple will have to allow other platforms to replace iOS on the iPhone? Sorry, but as the maker of the physical device, Apple should be able to determine what part of the hardware is and is not open for 3rd party access.

    It would be one thing if Apple's hardware had a monopoly, but it doesn't. But even then, there are still many other ways for people to make a payment. It is not Apple's fault that the banks in the US dragged their feet for so long in bringing contactless payments to the market. Other countries have had tap-to-pay for a decade now - no smartphone required.
    This. Maybe the government should open a case against Ford because, after all, they only allow Ford engines in their vehicles /s.
    williamlondonpujones1
  • Reply 9 of 41
    GeorgeBMacGeorgeBMac Posts: 10,298member
    Antitrust abuses are real and harmful.   They originated in the U.S. against the monopolistic abuses of the robber barons that, although they had produced great good for country were increasingly causing great harm to the country.

    It seems though, that these days, antitrust investigations are based more on the premise that "Big is Bad".  
    All legal investigations need to start with allegations of harm -- somebody did something that harmed somebody else.  It seems though that that principle has been abandoned in the chase to break down large corporations for no other purpose than to break down large corporations.

    40 years the U.S. broke up one of its premier corporations (AT&T) in the belief that its breakup would immediately serve the American people by helping competitors such as MCI.   What happened was that we essentially lost a premier company that helped drive America to its greatness but gained nothing.  

    If you want to fix a problem first you need to have a problem.  So what harm is ApplePay doing?   Who has been harmed and how?
    ...   The answer is:   There's no harm except somebody wants a piece of that action and they're pushing the antitrust button to get it -- just like MCI did with AT&T.
    williamlondon
  • Reply 10 of 41
    All these anti-trust issues miss one big point: iPhone users prefer things the way the are.  We appreciate the security and privacy of iOS and Apple Pay, and prefer not to have outside institutions digging their claws into it and screwing up a good thing.
    williamlondonGeorgeBMacNotoriousDEVdanox
  • Reply 11 of 41
    avon b7avon b7 Posts: 5,904member
    chaicka said:
    Unfair and Biased.

    What about Google Pay on Android phones and Samsung Pay on Samsung phones?

    Just because they ain’t as big as Apple Pay?

    Regulatory are no longer about regulating but more of a political machine and monetary generating machine.
    This isn't about Apple Pay per se. 

    This is about Apple Pay being the only route to make phone based payments with on an iPhone's NFC hardware. 

    It's a completely different issue.

    Samsung Pay, Huawei Pay, Google Pay, BBVA Pay etc are not the only options on the phones where they offered.


    That means the 0.15% slice of the pie Apple is taking is reserved for itself, as 'competition' in this area doesn't exist on iPhones. 

    We'll see what the different investigations conclude in regards to the situation. 



  • Reply 12 of 41
    I use Apple Pay because of the security and convenience.

    Note that the governments whining about this have no problem with the vampires that process payments for excessive fees. Nothing like getting tagged for $6 on an ATM transaction or the one used by my Gas and Electric Utility for online payments that charges like $2 to process an online bill payment.

    I do not want 3rds party nonsense that compromises security on my devices and do not want to see Apple change the OS to enable such crap.

    If they are so worried about anti-trust they can start by breaking up Disney, Comcast and AT&T.
    NotoriousDEV
  • Reply 13 of 41
    Nonsense. Any credit card can be added to the Wallet. This isn’t a credible line of argumentation.
    JWSCanantksundaram
  • Reply 14 of 41
    GeorgeBMacGeorgeBMac Posts: 10,298member
    Nonsense. Any credit card can be added to the Wallet. This isn’t a credible line of argumentation.

    It is to those looking for a piece of the action.   To the rest of the world, not so much.
  • Reply 15 of 41
    GeorgeBMacGeorgeBMac Posts: 10,298member
    avon b7 said:
    chaicka said:
    Unfair and Biased.

    What about Google Pay on Android phones and Samsung Pay on Samsung phones?

    Just because they ain’t as big as Apple Pay?

    Regulatory are no longer about regulating but more of a political machine and monetary generating machine.
    This isn't about Apple Pay per se. 

    This is about Apple Pay being the only route to make phone based payments with on an iPhone's NFC hardware. 

    It's a completely different issue.

    Samsung Pay, Huawei Pay, Google Pay, BBVA Pay etc are not the only options on the phones where they offered.


    That means the 0.15% slice of the pie Apple is taking is reserved for itself, as 'competition' in this area doesn't exist on iPhones. 

    We'll see what the different investigations conclude in regards to the situation. 




    So, from a privacy and security, standpoint Apple should sink down to lowest common denominator?

    While their at it, why not get rid of the Apple Store and convert to the Open Architecture model -- where anybody can do anything?

    Where is the line drawn?   And, who draws it?
  • Reply 16 of 41
    Wow, the EU again. God bless the EU parliament, may they endeavor to someday do something useful & constructive...
    NotoriousDEVJWSCanantksundaram
  • Reply 17 of 41
    You don’t understand. They DO get a piece of the action. But so too does Apple; the Banks don’t like sharing. 

    If this comes to pass, Apple should go ‘scorched earth’ and completely deactivate Apple Pay in EU. It won’t last long because the populous uproar will quickly make the EU gov thugs back down. 


    Nonsense. Any credit card can be added to the Wallet. This isn’t a credible line of argumentation.

    It is to those looking for a piece of the action.   To the rest of the world, not so much.

  • Reply 18 of 41
    wood1208wood1208 Posts: 2,546member
    Apple Pay is just a contact less mechanism where users/customers choose whatever credit card to pay with. So, go after Visa and Mastercard,Amx,etc.
  • Reply 19 of 41
    entropysentropys Posts: 3,116member
    avon b7 said:
    chaicka said:
    Unfair and Biased.

    What about Google Pay on Android phones and Samsung Pay on Samsung phones?

    Just because they ain’t as big as Apple Pay?

    Regulatory are no longer about regulating but more of a political machine and monetary generating machine.
    This isn't about Apple Pay per se. 

    This is about Apple Pay being the only route to make phone based payments with on an iPhone's NFC hardware. 

    It's a completely different issue.

    Samsung Pay, Huawei Pay, Google Pay, BBVA Pay etc are not the only options on the phones where they offered.


    That means the 0.15% slice of the pie Apple is taking is reserved for itself, as 'competition' in this area doesn't exist on iPhones. 

    We'll see what the different investigations conclude in regards to the situation. 



    You mean like going through Visa is the only way to have a Visa card, or MasterCard it have a MasterCard? Apple Pay is the same, it’s just a backend pathway. What the banks want to is to go around them like a barnyard animal in the story of the little red hen.

    it isn’t anticompetitive in any way, as you point out there are other possible pathways.
    BeatsStrangeDays
  • Reply 20 of 41
    avon b7avon b7 Posts: 5,904member
    avon b7 said:
    chaicka said:
    Unfair and Biased.

    What about Google Pay on Android phones and Samsung Pay on Samsung phones?

    Just because they ain’t as big as Apple Pay?

    Regulatory are no longer about regulating but more of a political machine and monetary generating machine.
    This isn't about Apple Pay per se. 

    This is about Apple Pay being the only route to make phone based payments with on an iPhone's NFC hardware. 

    It's a completely different issue.

    Samsung Pay, Huawei Pay, Google Pay, BBVA Pay etc are not the only options on the phones where they offered.


    That means the 0.15% slice of the pie Apple is taking is reserved for itself, as 'competition' in this area doesn't exist on iPhones. 

    We'll see what the different investigations conclude in regards to the situation. 




    So, from a privacy and security, standpoint Apple should sink down to lowest common denominator?

    While their at it, why not get rid of the Apple Store and convert to the Open Architecture model -- where anybody can do anything?

    Where is the line drawn?   And, who draws it?
    I have yet to see any conclusive evidence of a security threat from opening the NFC hardware up to other apps. 

    They would still run through Apple's API's. 

    The system would function just like it does on Android phones. Secure enclave, TEE etc. 

    I haven't heard about security problems on those phones either. 

    Using Apple Pay would still be an option. Users would still be able to ignore the alternatives if they wanted to.

    The problem from the investigation perspective is that Apple doesn't allow the alternatives to even exist. 


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