Apple opens up NFC transactions to developers, but says there will be ‘associated fees’

15.07.2024

Apple announced on Wednesday that it is expanding NFC (near field communication) access to third-party developers, following increased regulatory pressure. NFC is the technology behind Apple Pay and Wallet. Apple’s control over the iPhone’s NFC capabilities had been scrutinized by the European Commission, which had been investigating the company for potentially limiting competition in mobile payments. This scrutiny has led Apple to open up its NFC tap-and-go technology to third-party developers in the region.

Apple is now extending this access to developers in additional markets, starting with Australia, Brazil, Canada, Japan, New Zealand, the U.K., and the U.S., with more regions to be included later. These new NFC and Secure Element APIs will be rolled out with the iOS 18.1 update.

While Apple previously allowed limited third-party access to NFC for reading tags, the pressure from the EU’s antitrust case has resulted in Apple allowing competitors to access the iPhone’s Secure Element, which is essential for mobile payments. This decision helped Apple avoid an antitrust fine that could have been as high as $40 billion, equivalent to 10% of its annual revenue.

As other regions may adopt similar regulations to the EU’s, Apple is preemptively expanding NFC access to avoid potential issues. With the new APIs, developers will be able to create competitive Wallet apps and other applications that support in-app contactless transactions, including payments in stores, car keys, transit passes, corporate badges, student IDs, hotel keys, loyalty cards, event tickets, and, in the future, government IDs. This broader access is expected to drive innovation as developers enhance their existing apps or create new ones to leverage the expanded functionality.

However, developers must enter into a “commercial agreement with Apple” to use these new APIs, with specific terms and fees that Apple has yet to detail. Once granted access, developers will be able to utilize the Secure Element, a chip in the iPhone that securely stores sensitive information. Users can then either open the third-party app directly or set it as the default payment method in iOS settings, just like they can currently do with Apple Pay.