Regulators within the European Union are likely to accept Apple’s proposal of opening up the iPhone’s NFC chip for contactless payment solutions by third-party developers. The EU could accept the changes proposed by Apple as soon as next month, reports Reuters.
When approved, the EU will reportedly drop an antitrust investigation into Apple’s apparent monopoly over the iPhone’s NFC chip which has so far prevented developers from creating native Apple Pay competitors and contactless payment solutions on the iPhone. With the investigation being dropped, Apple will also avoid paying a hefty fine similar to the $2 billion penalty it was ordered to pay earlier this year over violations related to music streaming apps on the App Store.
Apple has already allowed banks and other financial institutions based in the European Economic Area (EEA) access to the iPhone’s NFC chip with iOS 17.4 launched last month. However, the EU was yet to accept Apple’s changes as satisfactory to its investigation. Reuters reports that the EU now seems mostly satisfied with the changes introduced with iOS 17.4 after discussing them with rivals and customers. The report also adds that Apple will have to tweak some fine technical details surrounding NFC access, after which the EU will formally accept the company’s changes with an official announcement as soon as May.
Contactless payments powered by the iPhone’s NFC chip can now be implemented with a different infrastructure and backend to Apple Pay or the Wallet app beginning with the iOS 17.4 update. Banks and other financial institutions based in Europe can now implement their custom third-party payment solutions on the iPhone.
Apple will also give iPhone users to set a default payment app to launch when near a contactless payment terminal or when the side button is double-clicked, much like setting a default web browser other than Safari. Currently, the default behavior of iPhones is to launch the Wallet app or a predetermined payment card when near an NFC terminal or through side button activation. Users in Europe now have the option to alter this behavior.
Apple says that third-party payment apps will be required to pass certain industry security standards, including the possession of up-to-date agreements with an approved Payment Service Provider in the European Economic Area (EEA). The company confirmed these changes in January and has provided additional details as promised.
These changes not only apply to the EU but also to the EEA. The European Economic Area includes the 27 member states of the Union but also adds three countries namely Norway, Iceland, and Lichtenstein. Banks and other financial institutions in those three countries with the EU member states now have access to the iPhone’s NFC chip.
