Banks and Credit Unions to Team Up Against Apple Pay Fees

In a major procedural setback for Apple Inc., a U.S. federal judge has officially granted class action certification to a landmark antitrust lawsuit alleging that the technology giant illegally monopolizes the mobile wallet ecosystem on iOS devices and extracts up to $1 billion annually in excessive transaction fees from financial institutions.

The order, issued by U.S. District Judge Jeffrey White, clears the path for thousands of banks, credit unions, and financial entities across the United States to join forces in a collective legal battle against Cupertino. Under the certified class definition, the litigation now formally encompasses any U.S. entity that issued payment cards enabled for Apple Pay and subsequently paid Apple a fee for transactions conducted using those cards.

In addition to granting class certification, Judge White handed the plaintiffs another strategic victory by denying a motion filed by Apple that sought to exclude testimony from the plaintiffs’ economic experts. Legal representatives for the financial institutions intend to use this expert testimony to establish that Apple holds unchecked monopoly power over the mobile wallet market on the iPhone ecosystem, leveraging hardware restrictions to shelter its service from natural market forces and competitive pricing pressures.

First brought to federal court in 2022 by law firm Hagens Berman on behalf of impacted credit unions and community financial institutions, the antitrust complaint zeroes in on Apple’s strict control over the iPhone’s hardware architecture—specifically the Near Field Communication (NFC) chip responsible for facilitating contactless tap-to-pay transactions. The lawsuit contends that Apple engineered an illegal monopoly by restricting third-party financial institutions and payment developers from accessing the native NFC hardware. By shutting out competing digital wallet applications, Apple made Apple Pay the sole functional contactless payment system on hundreds of millions of active iOS devices.

This operational exclusivity, the lawsuit asserts, enabled Apple to impose unprecedented transaction fees on payment card issuers—fees that financial institutions argue they would never have to pay in an open, competitive marketplace. Under the established fee structure detailed in the complaint, every time an iPhone owner completes a purchase using a credit card linked to Apple Pay, the bank or credit union that issued the card is obligated to pay Apple a 0.15 percent fee, equivalent to 15 basis points. For debit card transactions, Apple assesses a flat fee of half a cent ($0.005) per transaction.

While a fraction of a percent or half a penny may appear minor on an individual scale, the cumulative financial impact on financial institutions is immense. The complaint provides a concrete illustration of the fee dynamics: if a consumer uses an Apple Pay-linked credit card to make a single $1,000 purchase, Apple automatically collects $1.50 directly from the issuing financial institution. Multiplied across tens of billions of consumer purchases made annually across the United States, these micro-fees funnel an estimated $1 billion directly into Apple’s corporate coffers every year.

To highlight the allegedly anti-competitive nature of Apple’s practices, the lawsuit draws a direct contrast with Google’s Android mobile ecosystem. Unlike iOS, Android maintains an open infrastructure for contactless payments, permitting third-party developers, financial technology companies, and banking institutions to build their own digital wallets that directly utilize the device’s underlying NFC hardware. Because Android users can choose from a variety of tap-to-pay services, Google does not assess any transaction fees on card issuers for contactless payments processed through its platform.

Plaintiffs contend that Apple’s ability to charge substantial transaction fees relies entirely on its suppression of competition. If alternative mobile wallets were permitted to operate natively on iOS hardware and offer competing tap-to-pay services directly to consumers, market dynamics would prevent Apple from maintaining its mandatory fee structure on financial institutions.

The legal pressure and escalating global regulatory scrutiny surrounding Apple’s hardware lock-in have already begun triggering structural shifts within the company’s software platform. Following years of pushback from international regulators and ongoing domestic litigation, Apple altered its software ecosystem with the release of iOS 18.1. Under the update, Apple opened its NFC chip architecture to third-party developers, providing them with API access to build contactless payment mechanisms within their own standalone iOS applications.

This technical expansion has been made available across a broad spectrum of global markets, including the United States, Canada, Australia, Brazil, Japan, New Zealand, the United Kingdom, and the European Economic Area, among other jurisdictions. However, despite these recent technological adjustments, the plaintiffs argue that Apple’s opening of the NFC chip does not wipe away years of historical financial harm or compensate issuers for the billions in fee revenue collected while the exclusive lock-in was actively maintained.

Attorneys representing the certified class of financial institutions are pushing forward with two main objectives: full monetary restitution to recover the substantial fees paid by card issuers over the years, and binding injunctive relief designed to permanently dismantle Apple’s restrictive payment policies and ensure a fully open digital wallet market on iOS hardware.

The certification of the Apple Pay class action arrives during a period of heightened judicial and regulatory focus on Apple’s corporate practices and ecosystem rules. Beyond the mobile wallet litigation, Apple is navigating multiple legal battles concerning platform governance, technical exclusivity, and consumer transparency.

In a separate matter, Apple recently agreed to a $250 million settlement to resolve a U.S. class action lawsuit regarding delayed rollouts and performance issues associated with Siri AI features. In that case, a dedicated claims portal was launched to allow eligible iPhone owners to claim payouts estimated at $25 per device, with claims accepted through late December 2026. Simultaneously, Apple remains embroiled in high-stakes corporate litigation with major industry peers, including a high-profile federal trade secret lawsuit against OpenAI in San Jose, California, centered on technical trade secrets and former employee transfers.

With Judge White’s certification order now in place, the Apple Pay antitrust case moves toward its next critical phases, bringing thousands of American banks and credit unions into a unified front as the federal court examines whether Apple’s lucrative mobile wallet framework violates federal antitrust law.