Apple to Allow Third-Party Mobile Wallets on iPhones, as EU Reaches Agreement

The European Union has reached an agreement with Apple to allow other mobile wallet apps use the Near-Field Communication (NFC) technology on iPhones.

This ends a four-year investigation by the European Commission into Apple unfairly blocking competition with its Apple Pay service.

NFC, or Near-Field Communication, is a technology that allows nearby devices to communicate. It’s what makes contactless payments, like tapping your phone to pay at a store, possible. Until now, Apple only allowed its own Apple Pay to use this technology on iPhones.

The investigation, which began in June 2020, looked into Apple’s control over NFC technology, to find out if it was limiting competition. In May 2022, the Commission found that Apple was indeed using its position to keep competitors out, which reduced choices for consumers and limited innovation.

In response to these findings, Apple promised to allow other mobile wallet apps now access the NFC technology without having to use Apple Pay or Apple Wallet.

This will be done through something called Host Card Emulation (HCE), which allows payment information to be stored and transactions to be completed securely without relying on Apple’s own systems.

The tech giant also agreed to follow fair and transparent procedures for granting NFC access to other developers. This means any developer who wants to create a mobile wallet app will have the same opportunities to use the NFC technology.

Again, users will be able to set their preferred mobile wallet app as the default for payments, making it just as easy to use as Apple Pay.

To ensure Apple follows through on these promises, an independent trustee will monitor the company’s actions. There will also be a system in place to resolve any disputes quickly. These commitments will apply to all users in the European Economic Area (EEA) and will remain in effect for ten years.

European Commission Executive Vice-President Margrethe Vestager said this agreement opens up competition in a key sector and prevents Apple from excluding other mobile wallets from the iPhone’s space. She noted that the changes would benefit both consumers and developers by increasing choice and facilitating innovation.

This move is expected to comply with the upcoming Digital Markets Act, which aims to prevent tech giants from blocking competitors from key technologies.

iPhone users in the EEA will soon have more options for contactless payments. This is a win for consumers, who will benefit from more choices and potentially better services, and for developers, who will now have a fair chance to compete in the market.