EU eyes Apple Pay and its competitive edge

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Apple Pay on iPhone and Apple Watch
Apple Pay is the only NFC payment system allowed on iPhone. Is that anticompetitive, or Apple just being safe?
Screenshot: Apple

In August, EU antitrust investigators sent a questionnaire to banks and developers of rival payment systems about Apple Pay. They’ve gotten an earful, according to Margrethe Vestager, the EU Competition Commissioner.

“We get many, many concerns when it comes to Apple Pay for pure competition reasons,” Vestager told reporters. “People see that it becomes increasingly difficult to compete in the market for easy payments.”

As part of the probe, the EU regulators are asking online retailers if they are contractually obligated to use Apple‘s payment system over rival services.

Apple Pay is limited in Apple’s favor

The EU antitrust investigators only recently started their probe, and Vestager didn’t give specifics about what concerns her agency is hearing.

But in the past, there have been complaints about a limitation built into iPhones. Apple Pay uses iOS handsets’ NFC (Near Field Communications) capabilities to make transactions with stores’ point of sale machines. Apple’s is the only payment system with access to this NFC capability. This means it’s impossible to make a fully-functional version of WeChat Pay or Samsung Pay for iPhone.

Apple argues that this limitation makes iPhone safer. It’s harder to hack the NFC payments system when only Apple’s software can access it.

On top of the Apple Pay probe, the EU is in the midst of investigating the App Store, after Spotify claimed the 30% cut Apple takes of subscription fees is anticompetitive.

Source: CNBC