Tag Archives: Apple Pay

Apple Accused Of Antitrust Violations Over Apple Pay

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Apple was sued on Monday, July 18, in a proposed class action by payment card issuers accusing the iPhone maker of abusing its market power in mobile devices to thwart competition for its Apple Pay mobile wallet, Reuters reported.

According to a complaint filed in San Francisco federal court, Apple “coerces” customers who use smartphones, smart watches and tablets into using its own wallet for contactless payments, unlike makers of Android-based devices that let consumers choose wallets such as Google Pay and Samsung Pay.

The plaintiff in this complaint is Iowa’s Affinity Credit Union, who said Apple’s anticompetitive conduct forces the more than 4,000 banks and credit unions that use Apple Pay to pay at least $1 billion of excess fees annually for the privilege. According to Reuters, Apple did not immediately respond to requests for comment.

MacRumors reported that the lawsuit was filed in U.S. District Court in Northern California. The complaint specifically accuses Apple of multiple violations of the federal Sherman Act by “tying” Apple Pay to its mobile devices and monopolizing the “tap and pay iOS mobile wallet market.”

The Verge reported the Plaintiffs claim that Apple has an illegal monopoly over contactless payments on the iPhone, letting it force card issuers into paying fees (via Bloomberg). The suit is being kicked off by Iowa-based Affinity Credit Union, which issues debit and credit cards that are compatible with Apple Pay, but the company’s lawyers hope to make it a class-action case so other card issuers can join the lawsuit.

According to The Verge, lawsuits aren’t automatically granted class-action status – a judge has to decide whether or not to grant it. However, the law firm handling the case for Affinity, Hagens Berman, has a bit of a track record with class-action suits against Apple. It was involved with getting developers a $100 million settlement after alleging that the App Store’s rules were unfair, as well as with the ebook price fixing case that ended with Apple returning around $400 million back to customers.

The complaint is against Defendant Apple Inc., and for Plaintiff Affinity Credit Union, on its own behalf and that of all similarly situated payment card issuers.

Based on everything I’ve read about this lawsuit, it appears to be focused on getting banks and credit unions a reimbursement for the fees that they had to pay in order to offer their customers an Apple Card. The lawyers for Affinity Credit Union want a class-action lawsuit, which could potentially erase the fees that credit unions were charged by Apple.

It does not mean that anyone with an Apple Card can join in this particular class action lawsuit, or that card holders will benefit financially in any way – no matter what the final decision turns out to be. In my opinion, this is a lawsuit that is being presented in an effort to reimburse a specific credit union.

Apple Pay Coming to Target, Taco Bell, and More

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Apple announced that the number of merchants that support Apple Pay is expanding. Apple says that seventy-four of the top 100 US merchants now accept Apple Pay.

Target, Taco Bell, Hy-Vee supermarkets in the Midwest, Speedway convenience stores and Jack in the Box are the latest merchants to support Apple Pay, the most popular mobile contactless payment system in the world that lets customers easily and securely pay in stores using their iPhone and Apple Watch. With the addition of these national retailers, 74 of the top 100 merchants and 65 percent of all retail locations in the country will support Apple Pay.

Apple Pay is rolling out to:

  • All 1,850 Target locations across the US in the coming weeks.
  • More than 245 Hy-Vee stores in the Midwest
  • Inside the store at all 3,000 Speedway locations in the Midwest, East Coast, and Southeast
  • More than 7,000 Taco Bell locations
  • More than 2,200 Jack in the Box locations

This is in addition to the places that already support Apple Pay:

  • Costco completed the rollout of Apple Pay to over 500 U.S. warehouses
  • CVS Pharmacy introduced Apple Pay at all 8,400 stand-alone locations
  • 7-Eleven launched Apple Pay at 95 percent of its US stores last year.

The expansion of where Apple Pay is accepted is good news for people who are currently using an Apple Watch or an iPhone. It makes things a bit more convenient for them.

Obviously, this expansion doesn’t do anything at all for Android users – who are unlikely to switch over just to be able to use their phones to pay for their lunch at Taco Bell or Jack in the Box. It also does nothing for people who cannot afford an iPhone.

Apple Pay and Google Pay are Coming to 7-Eleven

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7-Eleven announced in a press release that Apple Pay and Google Pay will be accepted in most of its U.S. stores throughout September. This follows 7-Eleven’s previous acceptance of Samsung Pay.

“Frictionless experiences are in the future, and digital payments are key to such experiences. Consumers prefer shopping at retailers that offer digital payment capabilities,” said Gurmeet Singh CDO and CIO of 7-Eleven. “The ability to pay with their smart device gives consumers one more reason to shop at 7-Eleven.”

The press release points out the security, privacy and simplicity of Apple Pay and Google Pay. There is no doubt in my mind that there are plenty of people reaching for their smartphones, instead of their wallets, whenever they want to make a purchase. But, I don’t see that being the majority of people who make purchases at 7-Eleven.

7-Eleven is a convenience store. It’s a great place to go when you are traveling and need to pick up some quick snacks and a soda. It is where you go when the grocery store is closed and you just need a couple of household items. In other words, 7-Eleven isn’t competing for customers with local restaurants or stores that sell expensive electronics.

InfoScout says that 7-Eleven customers are generally low income young adults. As a group, their average “basket size” is $15.66. I’m unconvinced that 7-Eleven’s customers are going to spend more money, or visit the store more often, as a result of Apple Pay and Google Pay being accepted forms of payment.

Rewards Program may come to Apple Pay

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Apple LogoCredit cards, debit cards, rewards program cards, ID’s… The list of small plastic rectangles we’re saddled with is just one of the costs of doing business in the 21st century. Technology has been relatively slow in terms of providing solutions to the glut of cards we have to carry around every day. The rise of mobile apps has given us some relief, as many rewards programs are now operating with a simple scan of a barcode on a smartphone screen. But due to the complex nature of banking security and credit cards, mobile payments have taken longer to catch on.

We’ve seen some progress in this field recently with the introduction of Apple Pay. And while it’s incredibly swift and convenient for users of iPhones and Apple Watches to tap their devices against a payment terminal, Apple Pay has experienced a relatively slow rollout. There are still only a limited number of vendors that accept the service for payment and there are still many payment institutions that don’t even support it. And now Google is prepped to launch its own mobile payment system, one that could bring simple tap-to-pay technology to the millions of Android phones on the market.

Faced with these challenges, Apple may be looking at ways to increase user and vendor adoption of Apple Pay. Rumors are circulating that the company may introduce a rewards program of its own at the upcoming Worldwide Developer Conference in June. Details are slim on what this program could offer. Maybe it’d be a points system that’d allow users to trade in those points for products from the Apple Store. Or perhaps Apple would limit its rewards program only to digital products such as music, movies and apps. And since Apple Pay works with third-party banks to handle customer accounts, it seems possible that users could actually collect rewards thru this proposed Apple program as well as whatever rewards system are in place with their connected accounts.

Time will tell if the Apple Pay rewards program becomes a reality. Regardless, it’s good to see that Apple is working to expand its mobile payment service. My pockets are getting heavy under the weight of all of these cards!

Using NFC For The First Time

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NFC.pndNFC, short for Near Field Communication, is a technological set of standards that has been around for several years. Many Android phones have come equipped with NFC chips for several years. Some retailers along with fast food outlets such as McDonald’s support NFC transactions on every credit card reader.

My first NFC-enabled phone was a Galaxy S3, but I never felt compelled to even give it a try. For some reason I made the completely erroneous assumption that if I paid with my phone via NFC it would be charged to my phone bill.

Since Apple is now supporting NFC with the introduction of the iPhone 6 and 6 Plus phones, I decided I would give NFC a try on my Note 3 using Google Wallet.

I already had a Google Wallet account because I have bought apps via the Google Playstore. I have also used Google Wallet to purchase hotel rooms via online booking.

To use NFC, I installed the Google Wallet app on my phone. I authorized the app to tie to my existing Google Wallet account. I authorized the Google Wallet app to use my existing debit card by setting up a pin number inside the Google Wallet app. Next I went into the phone settings to turn on the integrated NFC radio chip.

I used NFC for the first time today at a McDonald’s in Shelby, Iowa. When it came time to pay, I simply turned the phone screen on and held the phone against the top of the McDonald’s credit card reader where there’s a sort of sideways WiFi-like symbol. It’s not even necessary to start up the app – that happens completely automatically. It popped up on my phone screen asking me to input my Google Wallet pin number, and the transaction was quickly completed. The McDonald’s order-taker and his manager were astonished!

It automatically debited my bank account. My existing bank debit card remained in my wallet.

As nearly as I can tell, the Apple Pay version of NFC differs from Google Wallet and other NFC payment schemes in that the Apple Pay app only works on NFC-enabled iPhones. The iPhone 6 finger print reader substitute’s for the pin number.

It is possible to pay using Google Wallet in two basic ways – either have it pay via a selected debit or credit card, or set up a Google Wallet cash card that you can transfer money into and out of. With the Google Wallet cash card it is possible to email money to anyone with an email address, which would require them to set up a Google Wallet account in case they don’t already have one set up.

Will I use NFC again? I certainly will. I’m constantly on the road and I find myself eating at McDonald’s and other fast food outlets far more than I’d like. So long as an NFC terminal is set up and I would be paying with my bank debit card, I will try utilizing NFC instead.

Perhaps now that Apple is putting its marketing, educational, and PR muscle behind NFC it will finally have a chance to catch on. If nothing else it’s worth it just to see the amazed reactions of the store clerks!