Thousands of U.S. banks and credit unions may pursue their Apple Pay claims together after a federal judge certified their antitrust lawsuit as a class action.
Financial institutions accuse Apple of blocking competing tap-to-pay wallets on iPhones while charging card issuers fees for transactions. They argue that Apple might impose such fees because rival wallets couldn’t compete for contactless payments on iPhones.
Judge Jeffrey White certified the class on September 23 and rejected Apple’s attempt to exclude the plaintiff’s damages expert. The ruling does not decide whether Apple violated antitrust law or owes money to issuers.
According to the credit unions’ lawsuit, card issuers pay Apple 0.15% of the value of credit card purchases made through Apple Pay and half a cent for each debit transaction. For example, a $100 credit card purchase through Apple Pay costs the card issuer 15 cents in Apple Pay fees.
Affinity Credit Union, GreenState Credit Union and Consumers Co-op Credit Union filed the lawsuit in 2022. They argue that Apple could not sustain Apple Pay fees with significant competition, pointing to Android wallets that do not charge transaction fees to card issuers.
The lawsuit claims that Apple blocked rival wallets from using the iPhone’s contactless payment hardware, leaving Apple Pay as the only option for tap-to-pay card transactions. Credit unions say the lack of competition has allowed Apple to charge inflated fees, which they want refunded along with changes to the disputed practices.
Apple had already attempted to dismiss the case. A 2023 ruling allowed the monopolization claim to continue, dismissing a separate charge that Apple illegally linked iOS devices to Apple Pay.
Thousands of issuers can pursue the case together
The certified class covers U.S. entities that have issued an Apple Pay-enabled card and paid Apple a fee for a transaction made with that card. Applicants estimate that thousands of banks and credit unions are eligible.
Apple did not dispute that the proposed class was large enough to meet the numerical requirements for certification. White found that the court can resolve key issues for the entire class rather than separately for each issuer.
Questions include whether Apple had monopoly power, harmed competition and charged fees to issuers of harmed cards. Apple’s uniform fees for credit and debit transactions could also provide a common way to calculate any surcharges if issuers prove their case.
The ruling also allows Christopher Vellturo, the plaintiffs’ damages expert, to testify. Vellturo compares Apple’s issuer fees to the zero-dollar issuer fees it attributes to competing mobile wallets, then uses that difference to estimate how many class members may have overpaid.
Apple disputed his methodology and asked the court to exclude his testimony. White instead found that Apple’s objections are about how convincing the analysis is, leaving the company free to attack its assumptions and conclusions as the case continues.
Tap-to-pay access for iPhones has changed since the lawsuit began
Apple’s restrictions have changed since the credit unions filed suit. Starting with iOS 18.1 in 2024, eligible third-party apps can handle contactless payments for iPhone without routing them through Apple Pay, and users can choose an eligible app as the default for contactless transactions.
According to Apple’s documentation, developers still need Apple’s approval and a commercial agreement that includes fees applicable to the platform. Apple’s developer fees are separate from the Apple Pay transaction fees disputed in the lawsuit.
The September 23 ruling allows the issuers to pursue their claims together, including a request to change Apple’s practices. Expanded NFC access may affect what changes remain necessary, but it does not resolve complaints about fees already paid or establish that the fees were illegal.
