Apple encountered service outages just days after suspending smartwatch sales, causing a pre-Christmas disaster.

A system glitch hit Apple Card, Cash, and Pay & Wallet, impacting an estimated 507 million Apple Pay users worldwide and over six million US cardholders. The disruption, lasting around five hours, prevented last-minute holiday purchases, with the outage starting at 6:15 am ET and impacting "some users."

Apple acknowledged the issue, stating an ongoing investigation.

Apple Resolves Apple Pay Outage

Services were restored by 10:45 am ET. The Apple Card, issued by Goldman Sachs and Apple Cash and introduced with iOS 11, revolutionized digital transactions, propelling Apple Pay to popularity.

Despite the setback, Apple Pay remains a leading digital wallet globally, enabling tap-to-pay and facilitating stored card transactions. Reports suggest 18.1% of US shoppers used Apple Pay in 2022, with projections estimating a rise to 23.3 percent by 2026. These disruptions may have dampened the holiday shopping experience, affecting millions worldwide who rely on Apple's services for festive purchases.

According to another source, Apple encountered service disruptions with its payment features, notably Apple Pay, as reported on the company's system status page. The outage, affecting Apple Card, Cash, Pay, and Wallet services, occurred from 6:15 am to 6:49 am, impacting some users.

However, the system status update confirming the resolution wasn't reflected until 10:50 am.

The outage affected web and in-app payment functionalities associated with Apple Pay and Wallet. While Apple acknowledged the issue on its status page and assured that it had been resolved, the company has yet to address the discrepancy regarding the duration of the reported outage. There's been no immediate response from Apple regarding the duration mismatch.

A Recent Lawsuit Regarding Problems in Apple Pay

A class action lawsuit alleges Apple received incentives from Visa and Mastercard, causing merchants to face increased fees for Apple Pay transactions.

Filed by Mirage Wine & Spirits in Illinois on behalf of all US Apple Pay-accepting merchants, the suit claims Apple's pact with the card networks obstructed competition, preventing the development of rival payment networks or third-party access to iPhone's NFC functionality.

The lawsuit contends that Apple received substantial ongoing cash incentives as a percentage of Visa and Mastercard's transaction fees, amounting to hundreds of millions yearly, to avoid competition in the payment market. This arrangement resulted in inflated merchant fees, as Apple's wallet app remains the sole option for iPhone tap-to-pay transactions.

While Apple has faced accusations of anti-competitive behavior concerning Apple Pay's restricted access, recent reports suggest it may open NFC access in the EU to evade a long-standing case and potential fines. This legal action underscores ongoing scrutiny over Apple's practices in the payment services domain, spotlighting the allegations of stifling competition and inflating merchant costs.

Despite the disruption caused by Apple's service outage and smartwatch sales halt, the restoration of payment services brought relief after five hours. However, ongoing legal issues, including a lawsuit alleging anti-competitive behavior with Apple Pay, add to the company's scrutiny. The holiday disruption revealed Apple's pivotal role in digital transactions, impacting millions worldwide.