Apple may allow third-party payment apps to use its NFC system
In a move complying with the Digital Markets Act (DMA) in the European Union, Apple is making significant changes in iOS 17.4, expanding options for app distribution and payment processing. The changes will take effect in 27 EU countries starting from March 2024, notes Apple. One of the notable changes made in response to the DMA is the opening up of the iPhone’s near-field communication (NFC) system, previously exclusive to Apple Pay, for other banking and wallet apps.
This marks a pivotal shift in Apple’s approach, allowing developers in the European Economic Area to utilize an iPhone’s NFC system in their apps for contactless payments. The announcement follows increased scrutiny from EU regulators, who have been investigating Apple’s alleged anticompetitive behavior related to restricting third-party access to the iPhone’s NFC technology since the launch of Apple Pay in 2015.
Apple notes some of the inconveniences users may face with third-party payment processing
“For apps that use alternative payment processing, Apple will not be able to issue refunds, and will have less ability to support customers encountering issues, scams, or fraud,” notes Apple. The company also updated its business terms available for third-party apps in the European Union, which their developers will have to follow to use alternative payment processing.
Nonetheless, Apple emphasized its commitment to user safety, outlining safeguards to mitigate potential threats. The safeguards, including Notarization for iOS apps and authorization for marketplace developers, aim to address and reduce these risks.
The European Commission’s investigation into Apple’s NFC practices began gaining momentum in May 2023
The commission raised concerns about Apple’s alleged anti-competitive practices, contending that locking the NFC chip solely to Apple Pay hindered competition in the mobile payment market. For Apple, opening the NFC system to third-party payment apps is allowing direct competition to Apple Pay inside its own ecosystem. This is something that the company didn’t want. However, it’s just going to have to deal with it.
In a move complying with the Digital Markets Act (DMA) in the European Union, Apple is making significant changes in iOS 17.4, expanding options for app distribution and payment processing. The changes will take effect in 27 EU countries starting from March 2024, notes Apple. One of the notable changes made in response to the DMA is the opening up of the iPhone’s near-field communication (NFC) system, previously exclusive to Apple Pay, for other banking and wallet apps.
This marks a pivotal shift in Apple’s approach, allowing developers in the European Economic Area to utilize an iPhone’s NFC system in their apps for contactless payments. The announcement follows increased scrutiny from EU regulators, who have been investigating Apple’s alleged anticompetitive behavior related to restricting third-party access to the iPhone’s NFC technology since the launch of Apple Pay in 2015.
Apple notes some of the inconveniences users may face with third-party payment processing
“For apps that use alternative payment processing, Apple will not be able to issue refunds, and will have less ability to support customers encountering issues, scams, or fraud,” notes Apple. The company also updated its business terms available for third-party apps in the European Union, which their developers will have to follow to use alternative payment processing.
Nonetheless, Apple emphasized its commitment to user safety, outlining safeguards to mitigate potential threats. The safeguards, including Notarization for iOS apps and authorization for marketplace developers, aim to address and reduce these risks.
The European Commission’s investigation into Apple’s NFC practices began gaining momentum in May 2023
The commission raised concerns about Apple’s alleged anti-competitive practices, contending that locking the NFC chip solely to Apple Pay hindered competition in the mobile payment market. For Apple, opening the NFC system to third-party payment apps is allowing direct competition to Apple Pay inside its own ecosystem. This is something that the company didn’t want. However, it’s just going to have to deal with it.
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