Apple has informed the EU that it will make its mobile payment system based on the NFC chip available to competitors. We explain why this is fun and what you can gain from it.
NFC chip in iPhone
As you know, the iPhone has an NFC chip. This is intended – with the exception of a few special functions – for mobile payments. However, these are currently only possible with Apple Pay, and that was a thorn in the side of the EU.
After years of discussions and rumors, Apple has now officially informed the EU that it is opening up its NFC chip to competitors. You as a user can set up an alternative Wallet app instead of the standard Apple Wallet app. These third-party Wallet apps will get all the privileges of the Apple app, such as the double click to open, as well as Face ID, Touch ID and PIN code for security.
Alternative payment apps
Apple has promised that competitors will be able to use the NFC chip in the iPhone for free for the next ten years. That gives hope that payment apps will soon follow suit and expand their integration with the iPhone.
In the simplest case, your banking app can become a Wallet itself to enable mobile payments. In addition, there are competitors such as Google Pay and PayPal. These give you the advantage that you can have all your payments go through one channel. The most extreme option is an alternative payment service such as the foreign Satispay. This not only lets you make payments, but also houses all your other cards and loyalty cards. The new European payment service Wero is also a possible candidate for an alternative Wallet app.
Official message from the EU
In a official message the EU gives some more details.
The commitments bring significant changes to the way Apple operates in Europe, benefiting competitors and customers. First, Apple commits to giving third-party mobile wallets access to NFC functionality. This access will be free.
This is done in what is called ‘Host Card Emulation mode’. This is a software solution that allows competing Wallets to make secure NFC payments. Apple Pay, on the other hand, relies on access to the ‘Secure Element’ in the iPhone. We accept Apple’s commitment because it provides an equivalent solution in terms of security and user experience. And it is easier to implement for both Apple and Wallet developers. Other Wallets already use this solution in an Android environment.
Secondly, Apple has pledged to provide access to key features available on iPhones. This includes double-click and Face ID. iPhone users will be able to double-click the side button of their iPhone to launch their favorite payment app. Competing wallets will also be able to use Face ID, Touch ID, and a password to verify users’ identities.Third, Apple will enable users to make the Wallet of their choice the default option on their iPhones. These commitments apply to users registered in the European Economic Area, including when traveling abroad.
Apple also won’t stop developers from combining NFC payments with other use cases, such as access control, concert tickets, digital IDs, and so on. Anything you might have in a wallet, that is.
Apple avoids fine
The settlement allows Apple to avoid a fine from the EU of up to 10 percent of the company’s global annual revenue. Given that Apple’s revenue in 2023 was around $383 billion, the fine could have been around $40 billion.
Near Field Communication (NFC) is a wireless technology that enables communication over short distances. NFC is often used for contactless payment transactions. Users can make secure and fast transactions with NFC-enabled devices, such as the iPhone.