Apple promises to obtain approval from the European Union regulatory agency, allowing competitors to use NFC payment technology on the iPhone
Apple Inc. has been approved by the European Commission to allow competitors to use NFC payment technology on the iPhone. Previously, Apple had refused to let competitors use this technology, only allowing payments through its own mobile wallet, Apple Pay. The European Commission believes that Apple's commitments address competition concerns and will open up competition in this field. Starting now, competitors can use the iPhone for mobile payments in stores to effectively compete with Apple Pay. Apple has also committed to expanding the possibility of initiating payments using payment applications on terminal devices in other industries
According to the financial news app Smart Finance, the European Commission has accepted the commitments made by Apple Inc. (AAPL.US), allowing the use of "tap to pay" technology on iPhones. Under the EU's antitrust rules, the institution has made Apple's commitments legally binding.
The European Commission stated that Apple's commitments address competition concerns as Apple had been refusing to allow competitors to use near-field communication (NFC) technology for contactless payments on iPhones, known as "tap to pay" in stores. Previously, only Apple's mobile wallet, Apple Pay, allowed iPhone users to make payments in stores and online with their devices.
Margrethe Vestager, the Executive Vice President in charge of competition policy, stated, "Today's decision makes Apple's commitments binding. By preventing Apple from excluding other mobile wallets from the iPhone ecosystem, competition in this key area is opened up. Competitors will now be able to effectively compete with Apple Pay on mobile payments in stores."
The EU's antitrust watchdog noted that its preliminary investigation found that Apple had abused its dominant position by denying access to the NFC chip on iOS to competing mobile wallet developers, reserving this access only for Apple Pay.
To avoid EU antitrust scrutiny, Apple initially committed to allowing third-party mobile wallets access to the payment chip on iPhones for a period of 10 years. Since January of this year, the European Commission has sought feedback on Apple's commitments.
The European Commission stated that they conducted a market test on Apple's commitments, and based on the test results, Apple modified its initial proposal and committed to expanding the possibility of initiating payments using Host Card Emulation (HCE) payment applications on other industry-certified terminals (such as commercial phones or terminal devices).
Apple also committed not to prevent HCE developers from combining HCE payment functionality with other NFC functions. The company also committed to removing the requirement for developers to obtain a license from a payment service provider (PSP) or reach an agreement with a PSP to access NFC input.
Furthermore, the American tech giant proposed allowing developers to pre-build NFC payment apps for third-party mobile wallet providers and enabling developers to prompt users to easily set up a default payment app and redirect users to the default NFC settings page, among other commitments.
The institution stated that these commitments will be in effect for 10 years and will apply throughout the European Economic Area (EEA)