Sunday, July 21, 2024

iPhone users in Europe will no longer have to use Apple Pay for mobile payments | CNN Business

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London
CNN
 — 

Apple has yielded to pressure by European regulators to give rivals access to the contactless payments technology on iPhones, meaning that their users will no longer be limited to the Apple Pay mobile wallet.

The development on the tap-to-pay technology underscores mounting regulatory scrutiny of Apple (AAPL) in the European Union, where it is also facing a potential huge fine for allegedly breaching the bloc’s landmark Digital Markets Act.

The European Commission, the EU’s executive arm, announced this and other changes to Apple’s business practices Thursday, saying they would open up competition in mobile payments on iPhones.

“iPhone users will (now) be able to use their preferred mobile wallet for payments in stores… while enjoying all the iPhone functionalities, including double click, tap-and-go and Face ID,” the EU’s competition chief Margrethe Vestager told journalists.

The tech giant has until July 25 to implement the changes, which will remain in force for 10 years and apply throughout the 30 countries in the European Economic Area.

Under the agreement, third-party mobile wallet developers will gain free access to the standard technology used for contactless payments with iPhones, known as near-field communication (NFC) technology. Apple will also allow iPhone users to choose which mobile wallet to make the default wallet on their phones.

“Apple is providing developers in the European Economic Area with an option to enable NFC contactless payments and contactless transactions for car keys, closed loop transit, corporate badges, home keys, hotel keys, merchant loyalty/rewards, and event tickets from within their iOS apps,” Apple said in a statement shared with CNN.

“Apple Pay and Apple Wallet will continue to be available in the European Economic Area for users and developers.”

The European Commission first raised objections against Apple’s tap-to-pay practices in 2022, having opened a formal antitrust investigation into Apple Pay two years earlier.

The regulators found that Apple had abused its dominant market position by restricting access to the NFC technology needed to make payments on mobile devices. That means rivals wanting to create apps or wallets using the tap-to-pay features on iPhones have been unable to do so and users have been forced to use Apple Pay for mobile payments.

“From now on, Apple can no longer use its control of the iPhone ecosystem to keep (competing) mobile wallets out of the market,” Vestager said. “Competing wallet developers as well as consumers will benefit from these changes, opening up innovation and choice while keeping payments secure.”

The commitments do not extend to Apple Watches, however. “Our impression was that the number of people who use Apple Watches for payments is rather small,” said Vestager, adding that there was “limited harm done” from excluding those devices.

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