Apple payment platform, Apple Pay, has been under scrutiny in Europe for quite some time. Many thanks to PayPal and other companies, Apple Pay is now under investigation by the EU. A few days ago, the EU officially commenced antitrust proceedings against Apple Pay. The latest report regarding this investigation is that some companies had to file “informal complaints” against Apple Pay. Want to guess the Chief of these complaining companies? Of course, it’s Apple Pay’s competitor, PayPal.
PayPal and other companies informally lament Apple’s restriction on third-party apps from accessing the iPhone’s NFC. Unfortunately for Apple, the European Commission thinks that limiting access to the NFC chip on the iPhone is not a fair practice. This prevents competitors like PayPal from being an option for payment in the app store.
In fact, no third-party app can have access to the iPhone’s NFC. This means that Apple Pay is the only payment option that users have. Thus, whatever fee Apple slams on users, they have no other option.
Restrictions are necessary for iPhone’s security and privacy – Apple
According to Apple, the reason for this restriction is the security and privacy of the iPhone. The company claims that giving other platforms access to iPhone’s NFC will make the phone vulnerable to attacks. However, the EU is not buying the explanation and has now launched a full-scale investigation
The European Commission has informed Apple of its preliminary view that it abused its dominant position in markets for mobile wallets on iOS devices. By limiting access to a standard technology used for contactless payments with mobile devices in stores (‘Near-Field Communication (NFC)’ or ‘tap and go’), Apple restricts competition in the mobile wallets market on iOS.
On Android, the “tap to pay” feature is available for PayPal. The company wants a similar feature for iOS devices. Unfortunately, for it to have this feature, it must go through Apple. With the current restrictions, this is not possible. However, Apple still argues that PayPal and other Apple Pay rivals are popular on the iPhone without the direct tap to pay option. Nevertheless, the company plans to “continue to engage with the commission to ensure European consumers have access to the payment option of their choice in a safe and secure environment.”
Apple has been quite strict with its restriction on the NFCs on the iPhones. This has been a subject of investigation in the past. Recall Apple’s issue with a couple of Australian banks? These banks were seeking access to NFC so as to launch an alternative to Apple Pay. However, they failed.