Apple's NFC Payment Tech Access for Rivals in Europe Set for Approval

Apple's offer to open its near field communications payment technology to rivals in Europe could be approved by regulators as soon as next month. In January, Apple offered a 10-year commitment to the European Commission, allowing third-party mobile wallets access to its payments chip on iPhones. The adjustments were made to the original terms, including providing additional features and functionalities such as defaulting of preferred payment apps and setting up a dispute settlement mechanism. The European Commission has invited comments on the commitments offered by Apple to address competition concerns, following its preliminary view in May 2022 that such exclusionary conduct may restrict competition in the market for mobile wallets on iOS devices.

Key Takeaways

• Apple's offer to open up its near field communications payment technology to rivals in Europe could be approved by regulators as soon as next month.
• The company made a 10-year commitment to the European Commission, allowing third-party mobile wallets access its payments chip on iPhones.
• Initially, Apple offered third-party mobile wallet and payment service providers to access and interoperate through APIs, with the NFC functionality on iOS devices free of charge.
• The tech giant also promised to provide additional features and functionalities, including defaulting of preferred payment apps, access to authentication features such as FaceID, and a suppression mechanism.
• The Commission informed Apple of its preliminary view in May 2022 that exclusionary conduct may restrict competition in the market for mobile wallets on iOS devices, in breach of certain EU rules.

Analysis

Apple's offer to open its near field communications payment technology to rivals in Europe could have far-reaching implications for the tech and business landscape. If approved by regulators, this move could impact not only Apple's competition in the market for mobile wallets on iOS devices but also third-party mobile wallet and payment service providers, which would gain access to Apple's payments chip on iPhones. Short-term consequences may include increased competition and access to new features, while long-term effects could lead to a more level playing field and potentially redefine the mobile payments industry in Europe. Countries, organizations, and individuals involved in the mobile payments sector will need to adapt to these changes.

Did You Know?

• Near Field Communications (NFC) payment technology: This refers to the technology that allows devices, such as smartphones, to communicate with other devices in close proximity, typically for making contactless payments.

• European Commission's preliminary view on exclusionary conduct: The European Commission expressed concerns in May 2022 that Apple's practices of limiting access to its NFC payment technology for mobile wallets may be restricting competition in the market, which could potentially violate certain EU rules.

• Additional features and functionalities promised by Apple: In its offer to the European Commission, Apple pledged to provide various additional features and functionalities, such as defaulting of preferred payment apps, access to authentication features like FaceID, and a dispute settlement mechanism.