Apple Opens iPhone Tap-to-Pay to Competitors in EU

Apple has announced its intention to open the iPhone’s tap-to-pay functionality to competitors in the European Union (EU), following scrutiny from the European Commission. The EU’s market regulator had determined that Apple, with its dominant position in iOS mobile wallet transactions, was limiting competition by excluding rivals. Apple’s proposal includes providing third-party developers in the European Economic Area (EEA) with an option to enable NFC contactless payments within their iOS apps, separate from Apple Pay and Apple Wallet.

This option will be available in the 27 EU countries and associated countries Iceland, Liechtenstein, and Norway. Apple assured that Apple Pay would remain available as an option, offering privacy, security, and a great user experience. The company has offered to make NFC on iOS devices accessible for free and create interfaces for competitors to securely store personal payment details for use in their own apps.

The European Commission has invited comments from companies in the contactless payments industry within a month to assess whether Apple’s proposal addresses competition concerns regarding access to tap-to-pay technology on iPhones and Apple Watches. The proposal suggests that only users with an Apple ID registered in the EEA could utilize these third-party apps, but Apple would not prevent their use for payments in stores outside the EEA.

Apple’s move comes after accusations of anti-competitive behavior by blocking NFC access on its phones to other companies. In May 2022, the EU executive accused Apple of such behavior, stemming from a probe initiated two years earlier based on complaints from EU banks. The commission noted Apple’s ‘closed ecosystem’ in Europe, where iPhones exclusively run on Apple’s iOS. The proposal seeks to address the issue by allowing competitors access to NFC technology.

While the changes are specific to the EEA, questions arise about how consumers and regulators in non-EU markets might perceive the change and whether they could advocate for similar treatment. Apple’s commitment to open NFC functionality is part of a broader trend in the EU to scrutinize major tech companies for anti-competitive practices, with the new EU Digital Markets Act introducing stricter obligations and anti-competitive scrutiny for tech giants starting March 2023.