Home » Why the government wants to rearrange your Apple Wallet

Why the government wants to rearrange your Apple Wallet

by NBC News

The Department of Justice’s landmark antitrust case against Apple could affect how consumers pay for everything from coffee to clothes.

In their nearly 90-page suit filed last week, state and federal prosecutors say that Apple’s alleged monopoly over the smartphone market extends to its handling of digital payments. As more people tap their phone screens at retail registers and pay for e-commerce purchases through wallet apps, the iPhone’s features for consumers and policies toward developers create an unfair advantage for Apple, the DOJ claims.

The tech giant rejects that view and has vowed to contest the government’s allegations in court — a process that will likely entail years of legal wrangling. But with the nature of smartphone transactions in play, here’s what could eventually change if prosecutors get everything they want.

More wallet apps

Antitrust enforcers want to give smartphone users more options and control over how they pay with their devices.

Apple currently restricts outside developers from creating their own digital wallets. The Justice Department argues that the policy limits users’ payment options and traps them within the Apple Wallet, the iPhone app that lets users load their debit and credit cards onto their devices. Authorities want to allow developers and banks to create wallet apps of their own that could operate on both Apple’s iOS platform and rival ones like Android.

That would let users transition more seamlessly to non-Apple devices, the suit says, because users could take their digital wallets and financial data with them — potentially spurring greater competition to develop better consumer financial apps and features.

The Apple Wallet app lets users load their credit cards and other payment methods onto their devices.Apple

The lawsuit also challenges Apple’s practice of charging banks up to 15% for credit card transactions on Apple Pay, its digital payments platform, arguing that the fees cut into lenders’ ability…

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