Apple has long been accused of creating an anti-competitive monopoly in the App Store. Authorities in many countries are therefore investigating the Cupertino company. An additional front is developing with Apple Pay: The company’s payment service is also increasingly being targeted by competition watchdogs. The reason for this is the strong growth of the service, the rise of which was once again accelerated by the corona pandemic.
The advantages of contactless payment
Contactless payment not only ensures convenience when shopping, but also offers health benefits compared to the classic exchange of cash, especially in relation to the corona pandemic. In addition, payments can be made via iPhone and other Apple gadgets at the checkout or conveniently online using biometric authentication. In contrast to many conventional bank cards, no PIN has to be entered for higher amounts. Finger or eye contact is sufficient.
507 million Apple Pay users
All of these benefits have made the service more popular in recent years. More than half a billion customers already use Apple Pay, according to market experts from Look Ventures. According to the latest figures, that would be around half of all iPhone users worldwide – and the market trend continues to point upwards. For comparison: four years ago Apple Pay only had 67 million users. The big increase since then has to do with the fact that the service is available in more and more countries.
By 2025, 10 percent of all credit card payments could be made through the Apple service, so Projections von Bernstein Research before the corona pandemic. The estimated value should now be even higher. With an estimated Apple revenue of 0.15 percent for every transaction via the payment service, Apple is opening up a huge market that could even exceed the billions in sales of the App Store.
Apple Pay Policies Anti-Competitive?
Authorities and consumer protection organizations in various countries have long been concerned with the rise of Apple Pay. Above all, Apple’s foreclosure of the NFC chip built into iPhones and other products is angry with the authorities and third-party competition. The charge: Apple secures exclusive access to the NFC chips in order to guarantee a monopoly on contactless payments on their own devices. Apple, on the other hand, justifies the foreclosure with security precautions and data protection aspects.
The EU has been studying Apple Pay business practices for a long time. Other authorities and organizations also check the service for competition violations, including the Dutch Authority for Consumers. The point is to find out whether users on iDevices have a free choice in terms of the services they use for contactless payments – or whether Apple is anti-competitive and does not allow any choice. Apple’s payment suggestions in the App Store are also up for debate. Since the company explicitly recommends developers to use Apple Pay over third-party solutions and to place corresponding payment proposals prominently, Apple is also confronted with objections from competition watchdogs in this regard.