Mastercard sued by digital wallet startup over access to payment tech

Mastercard Inc is facing a new lawsuit by a technology startup that accused the payments giant of stymying its efforts to build a “universal” digital wallet for consumers that can work across different mobile device platforms.

Published - February 23, 2024 10:17 am IST

Mastercard Inc is facing a new lawsuit by a technology startup.

Mastercard Inc is facing a new lawsuit by a technology startup. | Photo Credit: REUTERS

Mastercard Inc is facing a new lawsuit by a technology startup that accused the payments giant of stymying its efforts to build a “universal” digital wallet for consumers that can work across different mobile device platforms.

Massachusetts-based OV Loop Inc filed the lawsuit in Boston federal court on Tuesday, seeking more than $75 million in damages under U.S. antitrust law from Mastercard for allegedly denying it access to an essential digital payments technology.

OV Loop accused Mastercard of granting selective access to tokens that the lawsuit said are needed for a company to compete for digital wallet payments like those used for Apple Pay, Google Pay and Samsung Wallet.

“We are trying to do something that’s super ambitious,” OV Loop founder and chairman Will Graylin told Reuters on Thursday. Graylin, who previously helped launch Samsung Pay, said there was no business justification for Mastercard to deny what he called “equal access.”

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Mastercard did not immediately respond to a request for comment on Thursday.

OV Loop last year sued Mastercard in Manhattan federal court for allegedly infringing its patent rights in technology related to cloud-based card transactions. A judge in November paused the case amid related proceedings before a U.S. patent tribunal.

Graylin said his company, founded in 2018, wants to develop and market a “super app” for digital commerce.

India’s digital payments firm Paytm app is such an app, OV Loop said, offering services to consumers and merchants.

The lawsuit said Graylin has personally invested more than $36 million into the 30-employee OV Loop and that the company’s shareholders included Verizon Ventures and the venture capital firm Lightspeed Ventures.

OV Loop alleged Mastercard’s “exclusionary conduct” has caused it unspecified lost profits and business opportunities.

“Mastercard has used its size, influence, power, and wealth to stifle emerging technology companies, such as OV Loop, that threaten its grip over payment processing networks,” the lawsuit said.

Visa has been “more open with us,” than Mastercard, Graylin said. A representative for Visa did not immediately respond to a request for comment about its relationship with OV Loop. Visa is not a defendant in the lawsuit.

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