Apple is facing another lawsuit, this time over its financial payment platform. Customers from peer-to-peer payment companies Venmo and Cash App are claiming Apple is leveraging its monopoly to push out the competition. Apple’s own financial system, “Apple Pay”, is reported to inflate prices due to its unique position.
While users can still use other cash payment apps on iPhones, these do not have the same permissions that make Apple Cash easier to use. Reuters says:
Apple Inc (AAPL.O) has been sued by Venmo and Cash App customers in a proposed class action claiming the iPhone maker abused its market power to curb competition for mobile peer-to-peer payments, causing consumers to pay “rapidly inflating prices.”
Four consumers in New York, Hawaii, South Carolina and Georgia filed the lawsuit on Friday in San Jose, California, federal court. They alleged Apple violated U.S. antitrust law through its agreements with PayPal’s (PYPL.O) Venmo and Block’s (SQ.N) Cash App.
Apple has been expanding its banking operations. In 2019, it released its credit card in collaboration with Goldman Sachs, the “Apple Card.” In addition, it provides savings accounts and limited banking with its wallet feature. Benzinga continues:
The plaintiffs seek injunctive relief that would stop Apple from continuing to enter and enforce its anti-competitive agreements which restrain iOS peer-to-peer payment market competitors and would-be entrants. It adds that Apple should segregate or divest its Apple Cash business to prevent further harm to consumers.
Decentralized payments enable iPhone users to send payments to each other without any intermediary and with transaction costs significantly lower than what Venmo, Cash App, and Apple finally charge to move money to and from bank accounts and credit cards.
This lawsuit could further pry open Apple’s notoriously closed ecosystem. While the financial payment system on Apple is not the iPhone’s main attraction, it is key in making the device highly profitable.
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