Online payment trends: Show me the (digital) money
Retailers today need to offer a variety of payment options at checkout. Find out the hot trends, including digital wallets, cryptocurrency, and buy now, pay later.
In the growing world of mobile payments and digital wallets, Apple Pay is a heavyweight. As more consumers used mobile payments during the pandemic, Apple Pay won a whopping 92% of mobile wallet transactions in the US, according to Statista. The US lags only the UK in Apply Pay usage, researchers said.
European regulators have taken notice. On Monday, they accused Apple of thwarting mobile wallet competitors on iOS devices.
The European Commission issued what it described as its preliminary view that Apple abused its dominant position by limiting access to Near-Field Communications technology used for contactless payments with mobile devices in stores.
“We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple’s devices,” Margrethe Vestager, the commission’s executive VP of antitrust, said in announcing the action.
Today we have send @Apple a statement of objections. We are concerned that @Apple may have illegally distorted competition in the market for mobile wallets on @Apple devices. Now @Apple can answer our concerns.
— Margrethe Vestager (@vestager) May 2, 2022
EU Apple Pay antitrust claim: Apple responds
Asked for a response to the EU charges, an Apple spokesperson told me in an email:
“We designed Apple Pay to provide an easy and secure way for users to digitally present their existing payment cards and for banks and other financial institutions to offer contactless payments for their customers. Apple Pay is only one of many options available to European consumers for making payments, and has ensured equal access to NFC while setting industry-leading standards for privacy and security.
“We will continue to engage with the Commission to ensure European consumers have access to the payment option of their choice in a safe and secure environment.”
According to Apple, PayPal is a popular mobile payment option for European consumers, and some options like MobilePay are more widely adopted than Apple Pay in certain countries.
The tech giant cited security concerns — and customer experience — for controlling third-party access to the NFC controller in iOS devices.
European regulators flex their muscles
The EU Apple Pay action is the second antitrust accusation against Apple lodged by European regulators. Last April, the EU charged with anticompetitive practices in the music streaming market.
US tech giants have come under fire in the EU, where antitrust regulators have taken steps to curb their power.
Last year, the EU passed the Digital Markets Act, which would put rules in place aimed at preventing huge tech companies like Apple, Google, and Meta from abusing their market position.
EU regulators mean business. Companies of all kinds have been forced to step up digital security due to EU data security requirements. Regulators have meted out steep penalties against violators.
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Apple Pay, Google Pay, PayPal: Consumers want payment options
One thing we learned from the pandemic is that consumers like options when it comes to online shopping, including the way they pay.
Consumer – especially younger ones – expect to be able to pay in other ways besides credit and debit cards. Digital wallets, buy now pay later, and even cryptocurrency are becoming more widespread.
Apple helped lead this trend with great success, but was it too successful? The EU action is just the beginning of what will likely be a long legal battle.
Monday’s Statement of Objections is the first step in opening a formal antitrust case and doesn’t “prejudge the outcome of the investigations,” regulators said, but all eyes in Big Tech are sure to be watching closely as the legal element of our digital existence continues to form.
