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London CNN: Apple has given in to pressure from European regulators to allow competitors’ iPhones to use contactless payments, so their users won’t be restricted to using the Apple Pay mobile wallet.
The tap-to-pay technological development highlights the increasing regulatory scrutiny Apple (AAPL) is under in the European Union, where it might also face a hefty fine for allegedly violating the historic Digital Markets Act of the region.
This and other modifications to Apple’s business methods were revealed on Thursday by the European Commission, the executive branch of the EU, to foster competition in mobile payments for iPhones.
“iPhone users will (now) be able to use their preferred mobile wallet for payments in stores… while enjoying all the iPhone functionalities, including double click, tap-and-go, and Face ID,” Journalists were informed by EU Competition Commissioner Margrethe Vestager.
The adjustments will take effect in all 30 of the European Economic Area’s member nations and will be in effect for ten years. The tech giant has until July 25 to put them into effect.
The partnership provides free access to near-field communication (NFC) technology, which is the standard for contactless payments with iPhones, for third-party mobile wallet developers. Additionally, Apple will let iPhone owners select which mobile wallet to set as their phone’s default wallet.
“Apple is providing developers in the European Economic Area with an option to enable NFC contactless payments and contactless transactions for car keys, closed-loop transit, corporate badges, home keys, hotel keys, merchant loyalty/rewards, and event tickets from within their iOS apps,” Apple said in a statement shared with CNN.
“Apple Pay and Apple Wallet will continue to be available in the European Economic Area for users and developers.”
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After initiating a formal antitrust probe into Apple Pay two years prior, the European Commission voiced concerns about the company’s tap-to-pay methods for the first time in 2022.
The regulators concluded that Apple had obstructed access to the NFC technology required for mobile payment transactions, therefore abusing its dominant market position. This implies that consumers are now compelled to utilize Apple Pay for mobile payments since competitors who wished to develop apps or wallets utilizing the tap-to-pay capabilities on iPhones were unable to do so.
“Going forward, Apple will be unable to maintain its dominance over the iPhone ecosystem to prevent rival mobile wallets from entering the market,” stated Vestager. “These changes will benefit consumers and competing wallet developers alike, allowing for greater choice and innovation while maintaining payment security.”
