Digital Wallet Apple Pay Draws Antitrust Scrutiny
Apple’s digital wallet Apple Pay is under fire for possible antitrust violations, adding to the previous scrutiny over alleged anticompetitive behavior in its App Store, according to a report in Financial Times on Friday (Dec. 18).
Contactless payments have surged amid the coronavirus pandemic that took hold of the U.S. in March. Apple Pay use has since been escalating, and has gone from “being a convenience to a matter of public health,” said Jennifer Bailey, vice president of internet services at Apple Pay, per FT.
The Silicon Valley tech giant has faced several antitrust complaints this year, including a Dutch probe into Apple Pay and two separate investigations launched by the European Union.
“They are really building out, within the Apple Pay team, a financial services juggernaut,” said Jason Gardner, founder and chief executive officer of the payments platform Marqeta, per FT. “Apple Wallet is a killer app — more of a killer app than much of the world really understands right now. And it’s absolutely going to become a battleground for regulators in the future.”
Apple Pay is used by more than 507 million people, according to analysts at Loup Ventures, per FT, up from just 67 million in 2016.
An estimated 0.15 percent transaction fee is tacked on to each purchase, according to Bernstein analysts. Pre-pandemic, Apple Pay was tracking to process one in ten credit card transactions around the globe by 2025.
Recent PYMNTS research done in conjunction with PayPal in September showed that 57 percent of shoppers made decisions based on merchants’ digital payment offerings. Further, consumers want to avoid contact with point-of-sale terminals.
PYMNTS research in October showed that the use of Apple Pay at physical stores has gone up 59 percent since March. Some 208 million Americans own smartphones with a mobile wallet feature.