A new class action lawsuit in the United Kingdom accuses Apple of blocking competition in contactless payments on the iPhone and passing hidden costs to millions of people through Apple Pay. The claim says Apple locked down key parts of the iPhone’s payment system, allowing the company to charge banks fees that later showed up in everyday banking costs.
The Guardian reported the case and said the claim seeks up to £1.5 billion in damages on behalf of around 50 million UK consumers.
Lawsuit claims
The lawsuit argues that Apple Pay has acted as the only real contactless payment option for iPhone users in the UK since 2015. Apple kept tight control over the iPhone’s near-field communication technology and the Secure Element, which handles tap-to-pay transactions. Because of this, rival wallet apps could not compete with Apple Pay.
As a result, banks and card issuers had little choice but to use Apple Pay if they wanted to offer contactless payments on the iPhone. The claim says Apple then charged those banks a fee, often reported at about 0.15 percent of each transaction in the UK. It says those fees sit outside normal industry practice.
The lawsuit also says banks passed those extra costs on to customers through higher charges on products such as current accounts, credit cards, savings, and mortgages. Since about 98 percent of UK consumers use banks that support Apple Pay, the case says almost everyone paid more, even people who never used an iPhone.
If the case succeeds, the average payout per person would range from about £26 to £35.
Who filed the case
The claim comes from James Daley, the founder of the consumer group Fairer Finance. He says Apple’s control over Apple Pay created an unfair system that raised costs across the whole banking sector.
“People will have no idea they’ve been paying more for everyday banking because of the way Apple has operated Apple Pay.
By shutting out competition and charging hidden fees, Apple has pushed up costs for millions of consumers. Shockingly, this doesn’t just affect Apple Pay users or iPhone owners. Banks have passed these costs on to all customers, meaning everyone is paying the price.”
Daley also said the case aims to recover money for consumers and to hold Apple accountable for what he calls anti-competitive behavior.
Apple’s response
Apple rejected the claims and said the case should not go forward.
“Apple Pay is a seamless and secure way for users to make contactless payments, and one of many payment options available to consumers. Apple does not charge fees to consumers or merchants for using Apple Pay, and banks see meaningful benefits from offering Apple Pay to their customers, most notably fraud reduction.”
Apple also pointed to recent changes in the UK that allow third-party developers to use NFC and Secure Element tools in their own apps for contactless payments.
The lawsuit now sits with the Competition Appeal Tribunal. The court will decide whether the claim can move ahead as a collective action. If it does, the case would become the first major UK legal test of how Apple runs Apple Pay and whether its rules broke competition law.
