Apple opens iPhone tap-to-pay to third parties in EU


Hold Near Reader payment sheet for third-party NFC tap-to-pay implementation on iPhone in the EU.
Soon, third-party developers can offer tap-to-pay options utilizing the iPhone's NFC chip ... but only in the European Union.
Image: Cult of Mac

To comply with EU mandates, Apple will open the iPhone’s NFC payment chip to third parties, the company said Thursday. Starting in March, users in the European Economic Area will be able to utilize tap-to-pay services other than Apple Pay when making purchases.

The new payment option, part of sweeping changes forced on the iPhone and iOS by the EU’s Digital Markets Act, could cut into Apple’s services revenue. And the company warns that it could put users at risk.

iPhone opening to third-party NFC payments in EU

Introduced in 2014, the Apple Pay mobile payment service essentially turns the iPhone into a debit or credit card. After users add their bank cards, making purchases becomes as easy as tapping the iPhone on an NFC terminal or another Apple device.

Faster and more secure than swiping a credit card, Apple Pay offers users serious advantages in the convenience department. It also earns Apple a cut of transactions, boosting the company’s growing services division. By 2022, Apple Pay worked in approximately 60 countries. It reportedly handled more than $6 billion worth of transactions per year, making it bigger than MasterCard. And the list of countries where Apple Pay operates continues to grow.

Up until now, Apple Pay was the exclusive tap-to-pay option for iPhone owners. But once iOS 17.4 arrives in March, third-party app developers can create their own Apple Pay alternatives for EU users. That means, for instance, European iPhone owners might use PayPal or some other service at a tap-to-pay terminal the next time they go to a grocery store or restaurant.

Host card emulation is the workaround in iOS 17.4

“iOS 17.4 introduces new APIs for developers to support contactless payment transactions from within their banking or wallet apps using host card emulation (HCE),” says Apple’s developer support document. “Users based in the European Economic Area (EEA) with an iPhone running iOS 17.4 or later can initiate in-person payment transactions from a banking or wallet app at compatible NFC terminals or mobile devices that accept contactless payments.”

Apple recently signaled its willingness to open the iPhone tap-to-pay capability in the European Union. The move follows years of investigation by EU antitrust regulators. Since Apple faces similar scrutiny from U.S. regulators, the framework laid out Thursday could be a sign of things to come in the United States.

“We have offered commitments to provide third-party developers in the European Economic Area with an option that will enable their users to make NFC contactless payments from within their iOS apps, separate from Apple Pay and Apple Wallet,” the company told Reuters earlier this week.

Not as safe as Apple Pay?

As with all the EU-mandated changes, Apple plays up the fact that third-party solutions might not be as safe as Apple Pay.

“HCE apps, which are software-based solutions, can be more susceptible to attack vectors whereby payment transaction tokens and other sensitive financial data may be compromised, including through exposure to untrusted and potentially malicious entities,” says Apple’s support document.


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