As anticipated, Apple is off the hook in the EU regarding the limitations it has so far imposed on mobile payments, avoiding a possibly very hefty fine. The European Commission (EC), which had opened an investigation into these practices, has accepted Apple’s commitments to open access to the iPhones’ NFC chips to enable third-party apps to use tap to pay.
Apple has committed to allowing third-party bank apps to access the NFC chips to enable tap to pay. So far this has only been possible through Apple Pay, but that is changing in the EU.
The EC initially concluded that Apple abused its dominant position on iOS by refusing to allow competing mobile wallet developers to access NFC for payments.
The EC agreed with Apple’s concessions on the matter, namely to allow third-party wallet providers access to NFC, to apply a fair, objective, transparent and non-discriminatory procedure and eligibility criteria to grant NFC access to these developers, and to allow users to easily set a default app for mobile payments that isn’t Apple’s.
The third-party mobile payments will also be able to use the passcode, Touch ID or Face ID to secure the transactions. Apple has to establish a monitoring mechanism and separate dispute settlement system to allow for independent review of Apple’s decisions restricting access.
Note that all of these provisions apply only to third-party mobile app developers established in the European Economic Area (EEA) and to all iOS users with an Apple ID registered in the EEA. The functionality will keep working “temporarily” for them while traveling outside of the EEA. All of these terms are legally binding for Apple, and will remain in force for ten years. The EC will monitor the implementation through a trustee appointed by Apple who will report to the EC.
Margrethe Vestager, EC VP in charge of competition policy, said:
It is safe and convenient to pay with your phone. Apple has committed to allow rivals to access the ‘tap and go’ technology of iPhones. Today’s decision makes Apple’s commitments binding. It opens up competition in this crucial sector, by preventing Apple from excluding other mobile wallets from the iPhone’s ecosystem. From now on, competitors will be able to effectively compete with Apple Pay for mobile payments with the iPhone in shops. So consumers will have a wider range of safe and innovative mobile wallets to choose from.
