EU regulators aim at Apple checkout policy; JPMorgan's former payments boss finds a new job

Apple's App Store payment policies may be violating competition rules, according to the European Commission, which says the company could be fined nearly $40 billion as a result. 

The EU's rules say developers using the App Store and similar marketplaces must inform their customers of less expensive payment options, and enable steering to those options free of charge. The EU accuses Apple of violating these rules by not allowing developers to provide pricing information, among other alleged violations. 

Apple was given until March 25, 2025 — which is one year after the original investigation was announced — to respond to the EU's most recent assessment, which was issued June 24. If the EU finds Apple is in violation of Europe's Digital Markets Act, it could be fined 10% of its global revenue for 2023, which would be more than $38 billion. The commission this week also opened a new compliance investigation into Apple's updated contract terms, contending Apple has retained older terms that do not allow alternative payment channels. 

Apple said this week that it would not provide some of its new artificial intelligence-powered products in the EU due to the tougher regulations. Apple did not provide comment to American Banker by deadline. It told CNBC it would work with the EU to find a "solution" that would enable it to offer the new AI services in Europe. Apple also told The Verge and other media outlets that it has made several changes to follow EU payment processing regulations, including giving developers the opportunity to direct app users to the web to complete payments at a competitive rate. 

The EU has been investigating Apple for potential anti-competition rules violations for at least four years. In 2022, the Commission accused Apple of limiting access to the near-field communication technology that enables contactless payments, thus giving an unfair advantage to Apple Pay. 

And Apple and Google have faced lawsuits and regulatory pressure in different countries due to the fees the two firms charge for payments made through their respective app stores. These fees can be as high as 30%, though both companies have lowered these fees for smaller companies and in a few countries. 

In earlier American Banker interviews, payment experts have said the accumulated pressure on big technology firms from suits, regulatory enforcement and new laws will create opportunities for bank-led payment systems, such as the Early Warning-powered Paze Wallet. Technology companies that offer payment facilitation — or routing — could have an opportunity to enroll new consumers if Google and Apple's control over mobile payment app checkout is loosened. 

These analysts also caution that Apple and Google's security products and user experience will continue to provide an advantage for the large technology firms. — John Adams

London mobile payment firm and challenger bank Revolut plans to sell about $500 million of its existing shares in an effort to reach a $40 billion valuation, which would make it Europe's most valuable startup.

Revolut was most recently valued at $25 billion, which is down from its $21 billion valuation at the peak of the fintech market in 2021, according to the Financial Times. The FT also reports that Revolut is working with Morgan Stanley on the pending fundraising. Revolut did not comment on the report. 

Revolut in late 2023 redesigned its app as part of a global expansion strategy and an effort to become a financial "super app," or a centralized source for a variety of services that would enable it to compete with banks.

Revolut is also attempting to extend its strong European payments business to the U.S. to compete with U.S.-based payment firms such as Block and PayPal. 

The success of Revolut's pending share sale will draw attention from other payment firms and fintech investors that are looking for signs that the fintech market is rebounding after a slowdown that has lasted for most of the past two years. —John Adams

Bank technology seller Fiserv has hired payments veteran Takis Georgakopoulos to be senior advisor, executive vice president and member of the management committee. Georgakopoulos, who left JPMorgan Chase earlier in June, was global head of payments at the banking giant. He will join Fiserv September 6 and will work with Fiserv's management team on technology and other products. 

Fiserv's recent moves include seeking a special purpose bank charter, which would enable it to control the entire payments processing, including authorization, settling and clearing debit and credit card transactions. Fiserv has traditionally used banking partners for payment processing. The company is also expanding its open banking strategy, using account-aggregation tools acquired from technology firm Finxact to power a hub that connects sponsor banks to merchants that offer their own loans, card-issuing and loyalty programs.  

"Takis' extensive payments and leadership experience and operational expertise will be an outstanding addition to our strong team, as we continue to focus on creating value for our clients while investing in our products, services and people," said Frank Bisignano, chairman, president and CEO of Fiserv, in a release. 

During his 17-year career at JPMorgan, Georgakopoulos helped lead the bank's moves in mobile payments, including the development of clearXchange, the bank-supported funds transfer app that became Zelle. He was also involved in the bank's adoption of e-commerce, biometrics and blockchain. 

Current JPMorgan payment executives Umar Farooq and Max Neukirchen will succeed Georgakopoulos. — John Adams