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Apple reaches deal with EC on NFC payments access

Apple reaches deal with EC on NFC payments access

Apple has staved off massive European Commission fines by agreeing to open up the NFC chip technology that enables iPhone users to make contactless payments to third-party providers.

The EC says it has made the commitments offered by Apple legally binding under EU antitrust rules, resolving an antitrust case and avoiding a fine that could run into the billions of dollars.

The 10-year commitment is largely based on an offer made by Apple in January which sees the US tech giant allow third-party mobile wallet and payment service providers to access and interoperate the NFC functionality on iOS devices through a set of APIs free of charge, without having to use Apple Pay or Apple Wallet.

Apple will create the necessary APIs to allow equivalent access to the NFC components in the Host Card Emulation (HCE) mode, a technology issued to securely store payment credentials and complete transactions, without relying on an in-device secure element.

The agreement covers all third-party mobile wallet app developers established in the European Economic Area and all iOS users with an Apple ID registered in the EEA. In addition, Apple will not prevent the use of these apps for payments in stores outside of the EEA.

Apple also promising to allow the defaulting of preferred payment apps, access to authentication features such as FaceID, and a suppression mechanism.

The tweaks extend the possibility to initiate payments with HCE payment apps at other industry-certified terminals, such as merchant phones or devices used as terminal.

They also remove the requirement for developers to have a licence as a PSP or a binding agreement with a PSP to access the NFC input. In addition, Apple will allow NFC access for developers to pre-build payment apps for third party mobile wallet providers.

Says the EC: "The Commission concluded that Apple's final commitments would address its competition concerns over Apple's restriction of third-party mobile wallet developers' access to NFC payments in stores for EEA iOS users. It therefore decided to make them legally binding on Apple."

While the matter may now be settled in Europe, Apple also faces issues in the US, where the Justice Department has included access to the NFC chip technology as part of its wide-ranging lawsuit accusing the firm of monopolising the smartphone market.

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