Monday, October 9, 2023
Mobile wallets, after failing to make a case for consumer adoption for years, took off with the pandemic, as consumers and retailers sought ways to buy and sell with minimal physical contact, unlike cards or cash. Morning consult found 42 percent of Americans had used a mobile wallet in 2022.
But Apple has long opposed opening its devices to other wallets, like Google Pay. And regulators are taking note. The Consumer Financial Protection Bureau, here in the United States, and the European Union have been investigating Apple. Both seek to prove that Apple puts up roadblocks to rivals' wallets by restricting access to its near field communication technology.
In the United States, Apple is also facing a class-action lawsuit alleging violations of antitrust law, for the same reasons The class is made up of U.S. card issuers.
It has been the company's practice to charge the issuers of cards loaded onto its wallet a fee for every transaction initiated through the wallet. According to published reports, the company extracts about $1 billion a year from more than 4,000 card-issuing banks and credit unions.
It's unknown how much PayPal has agreed to pay for Apple Pay transactions with PayPal or Venmo credit and debit cards.
Apple dominates the mobile wallet market, with about 55 million users last year, according to the CFPB. Juniper Research expects U.S. mobile wallet transactions to total $179 billion this year and to reach $451 billion by 2028.
In a press release about the arrangement, Apple said PayPal credit and debit cards can add those cards to their Apple wallets by following a series of prompt. In the coming months, Apple noted, customers can also expect to be able to add PayPal Business Debit cards, as well as Venmo credit and debit cards to Apple Wallet by following steps provided in the PayPal and Venmo apps.
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