Mastercard Inc, the global payments giant, is embroiled in a new legal battle as Massachusetts-based technology startup OV Loop Inc files a lawsuit accusing Mastercard of obstructing its efforts to develop a “universal” digital wallet for consumers across various mobile device platforms.

Filed in Boston federal court, the lawsuit seeks over $75 million in damages under U.S. antitrust law, alleging that Mastercard’s actions have impeded OV Loop’s ability to create a digital wallet that can seamlessly function across different mobile platforms.

OV Loop claims that Mastercard’s selective granting of access to tokens essential for digital wallet payments, such as those used by Apple Pay, Google Pay, and Samsung Wallet, constitutes anticompetitive behavior. The startup alleges that Mastercard’s actions have hindered its ability to compete in the digital wallet market on equal footing.

Will Graylin, founder and chairman of OV Loop, asserts that there is no valid business justification for Mastercard to deny equal access to essential digital payments technology. Graylin, who previously played a pivotal role in the launch of Samsung Pay, emphasizes the importance of fostering an environment of fair competition within the digital payments landscape.

Mastercard, as of the time of the lawsuit filing, has not issued a response to the allegations put forth by OV Loop.

This legal action follows a previous lawsuit filed by OV Loop against Mastercard in Manhattan federal court, where OV Loop accused Mastercard of infringing on its patent rights related to cloud-based card transactions. The court temporarily halted proceedings in November pending related actions before a U.S. patent tribunal.

OV Loop, founded in 2018, aims to develop and market a “super app” for digital commerce, similar to India’s digital payments firm Paytm app, offering comprehensive services to both consumers and merchants.

The lawsuit underscores the significant investment and stakeholder support behind OV Loop, with founder Will Graylin personally investing over $36 million into the company, and notable shareholders including Verizon Ventures and venture capital firm Lightspeed Ventures.

OV Loop alleges that Mastercard’s “exclusionary conduct” has resulted in unspecified lost profits and missed business opportunities, accusing Mastercard of leveraging its size, influence, and financial resources to suppress emerging technology companies like OV Loop that pose a threat to its dominance in the payment processing sector.

While OV Loop highlights Visa’s comparatively more open approach, stating that Visa has been receptive to their initiatives, representatives from Visa have not yet responded to requests for comment on their relationship with OV Loop. Visa, however, is not named as a defendant in the lawsuit.

As the legal proceedings unfold, the outcome of the lawsuit will likely have significant implications for the future of digital payments and competition within the industry, potentially reshaping the landscape of digital commerce and innovation in the years to come.

By Admin

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