Apple announces major change: opens up NFC transactions to third-party developers, seeking to ease regulatory pressure and expand mobile payments capabilities. NFC, a type of short-range wireless technology, underlies the functionality of Apple Pay and other mobile payment systems, such as Google Wallet. The European Commission’s scrutiny of Apple’s NFC implementation on iPhones has finally led to a breakthrough, with the tech giant agreeing to grant third-party developers access to its tap-to-pay capabilities in Europe, ending years of investigation into potential anti-competitive practices.
Apple is expanding its reach into various new markets. Apple initially plans to release its new NFC and Secure Enclave APIs to developers in select markets including Australia, Brazil, Canada, Japan, New Zealand, the United Kingdom, and the United States, with additional regions to follow. The APIs are set to undergo changes once iOS 18.1 is released publicly.
Although Apple had traditionally permitted third-party developers access to the contactless technology on iPhones for purposes such as reading NFC tags, the EU’s antitrust investigation prompted the company to open up its iPay Secure Element to enable seamless tap-to-pay mobile payments. The timely deal prevented Apple from potentially facing an antitrust suit that could have cost the company up to 10% of its total annual revenue, a staggering sum equivalent to approximately $40 billion.
As various markets adopt EU regulations, Apple may be proactively addressing potential issues by allowing developers access to its NFC capabilities.
As the brand-new APIs take centre stage, developers will have the capability to offer innovative, secure products, including apps that facilitate seamless in-app transactions for services such as in-store payments, vehicle keys, closed-loop transit systems, company badges, student IDs, home keys, hotel keys, merchant loyalty and reward cards, event tickets, and eventually government-issued IDs. As the expanded entry unfolds, it’s likely that innovators will seize the opportunity to build novel solutions by upgrading existing applications and leveraging enhanced features, while others will develop new apps to take advantage of these improved capabilities.
While builders may initially resist, they will ultimately need to accommodate Apple’s terms through a comprehensive commercial agreement; details on this arrangement remain unclear. The settlement will permit builders to apply for an entitlement and settle the associated fees, underscoring that access is not unrestricted.
Following the successful installation, developers are empowered to leverage the newly available APIs to access the Secure Enclave, a dedicated chip within the iPhone where sensitive data is safeguarded and securely stored on the device. With the new feature, customers will be able to seamlessly access and utilise third-party apps directly, either by opening them individually or setting them as their default in iOS settings, thereby allowing for easy activation via the double-click of the side button, just like with Apple Pay.
