Apple will let other digital wallets into Apple Pay, and even be the default

🌈 Abstract

The article discusses the changes in the NFC (Near-Field Communication) capabilities of iPhones, including the ability for apps to access the Secure Element on iOS devices for various use cases beyond just Apple Pay.

🙋 Q&A

[01] NFC Capabilities of iPhones

1. Questions related to the content of the section?

• Until recently, iPhones could only use NFC for limited purposes like Apple Pay, tapping through public transit gates, and exchanging contacts with other iPhone users.
• With iOS 18.1, apps will be able to access the Secure Element on iOS devices to offer a wider range of NFC-based services, including in-store payments, car keys, transit passes, corporate badges, student IDs, home keys, hotel keys, merchant loyalty programs, event tickets, and government IDs in the future.
• iPhone users will also be able to set a default payment app that can be triggered by double-clicking the side button.
• Developers will need to enter into a commercial agreement with Apple, request the NFC and Secure Element entitlement, and pay associated fees to access these NFC capabilities on iOS devices.

2. Why is Apple opening up NFC access to developers?

• Apple's move to open up its contactless system broadly to developers follows its settlement with the European Commission as part of an antitrust action.
• As part of the settlement, Apple went beyond its obligations under the Digital Markets Act to allow for monitoring of its compliance over a 10-year period.
• The European Economic Area agents had previously stated that Apple's exclusive access to payments through iPhones may have had a negative impact on innovation.

3. What was the impact of Apple Pay's introduction in 2014?

• The rollout of Apple Pay contactless phone payments in 2014 spurred renewed interest in the technology, which was already being used by credit card companies and Google.
• At the time, Apple was reportedly receiving a commission on transactions through Apple Pay from banks and other card issuers.

[02] Developers' Access to NFC on iOS

1. What are the requirements for developers to access the NFC and Secure Element capabilities on iOS devices?

• Developers will need to enter into a commercial agreement with Apple, request the NFC and Secure Element entitlement, and pay the associated fees.
• Apple states that this is to ensure that developers and apps "meet certain industry and regulatory requirements, and commit to Apple's ongoing security and privacy standards."