Apple opens up NFC to third-party mobile wallets
Apple has made a significant move by agreeing to open up its Near-Field Communication (NFC) technology to third-party mobile wallet providers. This decision ends the exclusivity of Apple Pay and Apple Wallet and signals a shift in the company’s stance on competition within the mobile payments market.
Resolving Apple’s antitrust case with the EU
The opening up of Apple’s NFC technology comes as a resolution to the antitrust case the company has been facing with the European Commission. The Commission has been investigating Apple’s alleged violation of EU law by limiting competition in the mobile payments market through its iOS policies. This investigation has been ongoing for four years, but with this new commitment from Apple, a potential fine can be avoided.
Apple’s proposed commitments to the European Commission
Apple has proposed commitments to the European Commission in order to resolve the antitrust case. The company has offered to provide third-party developers in the European Economic Area with an option to enable their users to make NFC contactless payments from within their iOS apps. This means that rival mobile wallet providers will have the same access to NFC components called “Host Card Emulation (‘HCE’) mode” that Apple Pay currently enjoys. However, third parties will not have access to Apple’s secure element.
What Apple’s NFC access means for developers
For third-party mobile wallet app developers in the European Economic Area, Apple’s NFC access will be a game-changer. They will be able to securely store payment credentials and complete transactions using NFC technology. Apple has also committed to providing third parties with additional functionality, such as defaulting preferred payment apps and access to authentication features. This move will create a more level playing field for mobile wallet providers, allowing them to compete on an equal footing with Apple Pay.
Potential consequences for Apple if commitments are not met
If Apple fails to honor its commitments to open up NFC access to third parties, it could face severe consequences. The European Commission has the power to impose a fine of up to 10% of Apple’s worldwide turnover. This penalty would serve as a deterrent for Apple to ensure it complies with the agreed-upon commitments. The proposed commitments, if accepted, will be enforced for ten years, providing ample time for the market to adjust and competition to thrive in the mobile payments sector.
In conclusion, Apple’s decision to open up its NFC technology to third-party mobile wallets marks a significant change in the company’s approach to competition in the mobile payments market. By proposing commitments to the European Commission, Apple aims to resolve its antitrust case and avoid potential fines. This move will have a positive impact on mobile wallet developers in the European Economic Area, allowing them to compete more effectively with Apple Pay. However, Apple must ensure it honors its commitments to avoid the severe consequences that could come from failing to do so.
Analyst comment
Positive news. As Apple opens up NFC to third-party mobile wallets, it signals a shift in their stance on competition. This will create a more level playing field for mobile wallet providers and allow them to compete effectively with Apple Pay. If commitments are not met, Apple could face severe consequences, including potential fines of up to 10% of their worldwide turnover.
