Bowing to regulation! Apple opens NFC payment for the first time in history, no longer sticking to the iPhone click-to-pay cake

Facing years of pressure from regulators in the EU and other regions, Apple has finally relented, making an unprecedented concession in the near field communication (NFC) payment field, allowing competitors of Apple Pay the opportunity to tap into iPhone's Tap to Pay feature.

On Wednesday, August 14th, Apple announced that starting from the new operating system iOS 18.1, developers will be able to use the Secure Element (SE) inside iPhones to provide NFC contactless data exchange functionality in iPhone applications developed by themselves, without going through Apple's payment and wallet services Apple Pay and Apple Wallet. To use these new features within the apps, users can directly open the app or set the app as default in iOS settings, then double-click the side button of the iPhone to initiate the transaction.

Apple stated that through the new NFC and SE APIs, developers will be able to provide contactless data exchange within the app, which can be used for closed-loop public transportation, corporate badges, student IDs, home keys, hotel keys, merchant loyalty and rewards cards, even event tickets, and will eventually support identity documents. These APIs will first be provided to developers in Australia, Brazil, Canada, Japan, New Zealand, the UK, and the US through the upcoming iOS 18.1 developer resources, and will be rolled out to more regions in the future.

At the same time, Apple pointed out that in order to incorporate the new contactless data exchange functionality in iPhone apps, developers need to sign a commercial agreement with Apple, apply for and obtain NFC and SE authorization, and pay related fees. This will ensure that developers comply with specific industry and regulatory requirements, and adhere to Apple's security and privacy standards.

The above Apple announcement means that Apple will start allowing third parties to use iPhone's payment chip to process transactions, allowing banks and other service providers to compete with the Apple Pay platform. Some media outlets have reported that up to now, many functions of the iPhone NFC chip can only be used by Apple Pay and Apple Wallet, and this "exclusive" advantage will change with the launch of iOS 18.1.

Some media also mentioned that this opening of NFC payments is the result of years of pressure on Apple from regulators in the EU and other regions. Wall Street Journal noted that earlier this year, Apple made a series of concessions under EU antitrust pressure.

In January of this year, Apple announced a series of historic and significant reforms to its iOS, Safari, and App Store products in the EU. The reforms will allow customers to download software from sources other than the Apple App Store for the first time. People will also be able to use other payment systems and more easily choose a new default web browser.

On July 11th, the European Commission announced a settlement with Apple regarding a mobile payment anti-monopoly investigation. Apple has decided to allow third-party mobile wallets and payment services to use the technology behind the Apple Pay app. They have committed to freely open up the mobile payment function based on NFC technology to competitors, and these commitments will last for ten years, applying to the entire European Economic Area. This means that Apple will, for the first time in history, open up payments to third parties.

Last Thursday, Apple announced that in order to comply with the EU's Digital Markets Act, they will make significant updates to the App Store policies. This will allow European developers to promote and sell products outside of Apple's ecosystem, no longer limited to Apple's App Store. The new rules will take effect this autumn