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  • Thierry Spanjaard

Legislation to impact NFC access on iPhones

Many of the players in the mobile payment sector, especially on the financial institution side, use to report difficulties in dealing with Apple when they implemented Apple Pay, citing arrogance, lack of transparence and lack of flexibility among their grievances along with the level of fees collected by Apple.

Now, Margrethe Vestager, European Commissioner for Competition from 2014 to 2019, and Executive Vice President-Designate of the European Commission for a Europe fit for the Digital Age from 2019, is lending a new ear to these complaints, considering a more even competition field would certainly make Apple less arrogant while delivering better choices to European citizens and all mobile payment stakeholders.

Margrethe Vestager said she has received “many, many concerns” regarding Apple mobile payment service after regulators had sent out a questionnaire to market participants during the month of August to find out if they had been asked whether Apple limited their options for mobile payment use. According to Reuters, “Vestager said she might investigate Apple Pay if there were formal complaints. At least one party has gone to the European Commission with its grievance.”

Among ways to restrict competition, first comes the fact that Apple restricts access to the NFC chip in its iPhones. While Apple claims controlling the whole environment from the Secure Element to the NFC communication provides security, the European Commission might consider this as restricting competition as it does not allow to install Google Pay, Samsung pay or others on an iPhone. The controlled approach Apple takes on its ecosystem is opposite to the open Android context which is often blamed for providing poor security due to the ease of access to core components likely leading to the development of potentially fraudulent apps.

In the wake of this EU level action, a German parliamentary committee passed a new law that requires Apple to allow other mobile payments services access to the iPhone’s NFC chip for payments to allow them to fully compete with Apple Pay. This came in the form of an amendment to an anti-money laundering law, which is set to come into effect early next year if passed by the upper house of Parliament, the Bundesrat. The legislation, which did not name Apple specifically, will force operators of electronic money infrastructure to offer access to rivals for a reasonable fee, according to

Apple, however, claims this move could be harmful to users' payment experience and compromise the security and privacy of financial data. In a statement to Engadget, Apple said it was “surprised by the suddenness of this legislative process.” The company intends to fight the proposal and says, “we look forward to engaging with the German government to help them understand our technical approach to Apple Pay and we'll continue to work closely with the EU regulators.”

Apple Pay launched in 2014: the company stated it is now available in 57 countries globally, including all 28 EU member states. Over its five years of existence, Apple Pay has been steadily expanding, in the US, in Europe, and more globally. It surpassed Paypal for the first time last quarter, when it recorded more than 3 billion transactions.

These events happen in a context when globally the US are on a path to make their relationship with the EU more uneven, when Libra, which is seen as a threat to monetary sovereignty is announced, and when European financial institutions are considering launching PEPSI, a European payment scheme aimed at becoming less dependent from US-led Visa and MasterCard. All these hints together seem to indicate a will to set up a European economic policy, a vision targeting more independence and aiming at a better sovereignty at the European level.

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