Apple Pay competitor apps coming – but should Apple offer more?

January 21, 2024

iPhone users are set to see Apple Pay competitor apps being launched by banks and finance companies, after the Cupertino company gave in to European antitrust pressure to allow them access to the NFC chip.

But before regulators give the okay to the concessions Apple has offered, they are asking both finance companies and iPhone owners whether they want the company to offer more …

What’s this all about?

We knew as long ago as 2014 that Apple would be limiting access to the NFC chip in the iPhone, though the full extent of the restrictions wasn’t known at the time.

In the event, Apple decided that only its own mobile wallet app, Apple Pay, would be allowed to access the chip for payments. That meant that banks and finance companies who wanted their cardholders to be able to make payments using their iPhone were forced to sign an agreement to support Apple Pay, and hand over a small cut of transaction fees to the iPhone maker.

As soon as the full terms were known, banks lost no time in filing antitrust claims against Apple, arguing that their own apps should also be allowed to access the NFC chip for virtual card payments. Apple maintained its refusal to do so.

By 2019, it was clear that Apple was losing the argument in Europe, with a formal antitrust investigation launched the following year.

Apple Pay competitor apps coming

By last year, Apple had conceded the issue, and offered to give third-party payment cards access to the NFC chip without having to go through Apple Pay.

This means that bank and payment card apps will now be able to allow you to make payments using your iPhone and Apple Watch without the need to register them for Apple Pay.

Do Apple’s concessions go far enough, asks EU?

Apple has offered the following concessions:

  • Only banks and finance companies in the EEA* get access
  • Though once an EAA card is registered, it will work worldwide
  • iPhone owners can choose to register a card for Apple Pay or a bank’s own app
  • The same security and authentication processes will apply
  • The access lasts for 10 years

*European Economic Area: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.

However, before the EU drops the antitrust case, it is asking both iPhone owners and banks to confirm they are happy with the concessions offered by Apple. Reuters reports.

The European Commission is seeking feedback from rivals and customers on concessions Apple offered to settle EU antitrust charges and stave off a possible hefty fine, it said on Friday.

Rivals and customers have one month from the publication of the summary to come back with feedback. Once approved, the implementation of these commitments will be monitored by a trustee, who will report to the Commission.

Photo by Nathan Dumlao on Unsplash

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