EU may require Apple to give competitors access to Apple Pay tech

Posted:
in General Discussion
Apple may have to open up its contactless payment technology at the core of Apple Pay to competitors if the European Union rules that Apple's restrictions unfairly hurt competitors.

EU may require Apple to give competitors access to touchless payment tech


The new laws would prevent mobile device manufacturers from barring access to a device's near-field communications (NFC) chip. These chips are commonly embedded in smartphones, like the iPhone, but also both the iPad and Apple Watch.

In October, the EU began asking payment companies for feedback on Apple Pay as part of an antitrust investigation. Competitors, such as banks and alternative payment methods, have argued that Apple Pay makes alternative payment services less attractive.

"In parallel with its ongoing and future competition enforcement, the Commission will examine whether it is appropriate to propose legislation aimed at securing a right of access under fair, reasonable and non-discriminatory conditions, to technical infrastructures considered necessary to support the provision of payment services," the EU says in a document seen by Bloomberg.

Apple has argued that limiting access to the NFC chip provides tighter security, especially when handling sensitive banking data. Apple also says that this is one of the reasons consumers choose Apple Pay in the first place.

The EU addressed the concerns in its document, stating that it would take account of potential security risks and would outline criteria for whom and under what conditions access to the NFC chip could be granted.

Apple's restriction of its NFC chip has long been hotly debated, both domestically and abroad. When Apple Pay launched in Australia in 2015, a block of major banks sought approval to collectively boycott Apple Pay for a chance to negotiate the installation of third-party software on iPhone hardware.

The banks caved and began to integrate Apple's solution after the Australian Competition and Consumer Commission denied their boycott request in 2017.
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Comments

  • Reply 1 of 38
    I've never really understood this line of thought.  Someone else builds a payment concept into their hardware and you're owed access to it simply for existing and wanting it?  Don't most of these card companies embed an NFC chip into our cards already?
    magman1979razorpitchiarob53pujones1yojimbo007StrangeDaysolswatto_cobra
  • Reply 2 of 38
    Apple is right!  I trust them so I use Apple Pay. If this protection gets compromised I will not be using it. Maybe that is their plan. If people stop using it they can go back to the old ways where they control the money
    magman1979williamlondonpscooter63pujones1olsMplsPwatto_cobraJanNL
  • Reply 3 of 38
    I've never really understood this line of thought.  Someone else builds a payment concept into their hardware and you're owed access to it simply for existing and wanting it?  Don't most of these card companies embed an NFC chip into our cards already?
    Yes, but the idea is to be able to tap with your phone rather than using your card, or in the case of third party apps, having to use a QR code or some other non-NFC method for their app to work.

    genovelle said:
    Apple is right!  I trust them so I use Apple Pay. If this protection gets compromised I will not be using it. Maybe that is their plan. If people stop using it they can go back to the old ways where they control the money
    Protection? Allowing another app to use NFC shouldn't affect security, although there may be privacy implications. You would still have a choice of which app you use.
    williamlondoncaladanian
  • Reply 4 of 38
    I’m getting pretty sick of there type of whining. If “competitors” want a fair playing field they already have it. In short develop your own phone, ecosystem then maybe they can compete. After all I don’t see the EU going after Google to open up Google pay which is a competitor. It’s not like the banks have a monopoly now is it.... oh wait. 
    razorpitiloveapplegearchiapscooter63pujones1dchenderolsrevenantwatto_cobra
  • Reply 5 of 38
    I don't get how competition is being restricted.  I'm in the UK and as far as I know I can use whatever credit/debit card I like - it's simply a matter of registering the card and iPhone with the bank/credit company.  The banks and credit companies are still getting their cut.  

    The ones being cut out are the advertising companies who think they have a God given right to know anything and everything about the individual.

     
    rotateleftbytebageljoeymacseekerchiaStrangeDaysolsaderutterwilliamlondonwatto_cobra
  • Reply 6 of 38
    Ha ha ha. The headline might as well be “EU lives in LaLaLand.”

    Contrary to popular perception, cash and cash-like cards (e.g., debit cards) still rule in many countries. Rollout of contactless payment forms including its advanced forms like ApplePay, especially POS systems, are a work in progress. Germany, shockingly, is still a heavily cash-based economy. 

    The EU will probably stay stuck there for a while. 
    SpamSandwichwilliamlondonwatto_cobra
  • Reply 7 of 38

    ...
    In October, the EU began asking payment companies for feedback on Apple Pay as part of an antitrust investigation. Competitors, such as banks and alternative payment methods, have argued that Apple Pay makes alternative payment services less attractive.

    ...
    What else would you expect if you ask competitors what they think?

    I don't recall ever seeing that they ask consumers what they think.
    pujones1FileMakerFellerwatto_cobra
  • Reply 8 of 38
    “Competitors, such as banks and alternative payment methods, have argued that Apple Pay makes alternative payment services less attractive.“

    So Apple is guilty of inventing a superior technology competitors cant keep up with ...  there fore Apple has to share its intellectual property to help the competitions?
    Thats considered Pro-Innovation? What kind of Ludicrous reasoning is this...?
    Then I guess Tesla should share their intellectual property since VW cant match their  technology?

    Is  having a superior Technology considered  Anti Trust???

    Seems to me Europe's approach is one of desperation and totalitarianism.
    tmaywatto_cobra
  • Reply 9 of 38
    I love using ApplePay, however it is much easier using it with a mask if you have TouchID.  It is a real PITA to have to lower my mask to make payments, but I understand that no one could have foreseen this situation 2/3 years ago when the FaceID development was underway.

    Seems like maybe Apple will have to cut off EU users from ApplePay?  Then they can go back back to the payment utopia that banks enjoyed before ApplePay came in.  
    Because banks always have the consumers best interests at heart and would never, never do anything to undermine privacy, security, consumer choice & convenience. 

    Now... who wants to buy a nice, cheap bridge?
    watto_cobra
  • Reply 10 of 38
    mknelson said:
    I've never really understood this line of thought.  Someone else builds a payment concept into their hardware and you're owed access to it simply for existing and wanting it?  Don't most of these card companies embed an NFC chip into our cards already?
    Yes, but the idea is to be able to tap with your phone rather than using your card, or in the case of third party apps, having to use a QR code or some other non-NFC method for their app to work.

    genovelle said:
    Apple is right!  I trust them so I use Apple Pay. If this protection gets compromised I will not be using it. Maybe that is their plan. If people stop using it they can go back to the old ways where they control the money
    Protection? Allowing another app to use NFC shouldn't affect security, although there may be privacy implications. You would still have a choice of which app you use.
    Apple has an extra layer of security in the enclave that they would have to give access to. The less these companies have access to the better. Keeping security close to the vest is best. I do not support this measure at all. Buy an android if you trust complete openness 
    macsince1988tobiantmaywatto_cobra
  • Reply 11 of 38
    Like this would ever happen. Why don’t they ask for the entire iOS codebase while they are at it? Ridiculous. 
    edited September 2020 watto_cobra
  • Reply 12 of 38
    lostkiwi said:
    I love using ApplePay, however it is much easier using it with a mask if you have TouchID.  It is a real PITA to have to lower my mask to make payments, but I understand that no one could have foreseen this situation 2/3 years ago when the FaceID development was underway.
    You don’t need to lower your mask, if you give it a second to not recognize your face it will give you the option to “Pay with Passcode”.  I agree it’s a bit annoying but there is an alternate way to do it.

    I’ve included the Apple Support site below, look at the steps within the “Use Face ID to make purchases” section, number 3:

    https://support.apple.com/en-us/HT208109
    JaiOh81watto_cobra
  • Reply 13 of 38
    jfanningjfanning Posts: 3,398member
    I’m getting pretty sick of there type of whining. If “competitors” want a fair playing field they already have it. In short develop your own phone, ecosystem then maybe they can compete. After all I don’t see the EU going after Google to open up Google pay which is a competitor. It’s not like the banks have a monopoly now is it.... oh wait. 
    Why would they be going after Google when you can already set which payment provider you want to use in the NFC settings of Android?
    gc_ukcaladanian
  • Reply 14 of 38
    Apple is just making excuses so it can get a cut from contactless transactions, and is using the same excuse for restricting apps to their own App Store. Android devices have been doing contactless for a long time and allows bank app to have direct access and we haven’t heard of any breaches or hacks. There are layers of security and encryptions, Apple can make an API to ensure these things. I don’t understand people defending Apple, these same people won’t accept these restrictions on a Mac.
    gc_ukwilliamlondoncropr
  • Reply 15 of 38
    gc_ukgc_uk Posts: 110member
    Contactless payment is an EMV standard. Apple didn’t invent anything, they just branded it and set themselves up as a payment processor.  Contactless payments existed for many years before Apple Pay was introduced. The US were trailing the world in payment technologies which is why these things appeared new to Americans. 

    With my bank card I can choose which payment processor to use when I make a payment, and I’m charged appropriately for it, but with an Apple device neither me or the merchant have a choice. Merchants pay fees depending on which processor is used as well. 

    The argument that the EU aren’t going after Google Pay is a false equivalence. Android allows other payment processors to access the NFC interface. How else do you explain payment systems from Samsung, WeChat etc on Android phones alongside Google Pay but they don’t exist on Apple products?
    caladanianwilliamlondoncropr
  • Reply 16 of 38
    avon b7avon b7 Posts: 6,437member
    Ha ha ha. The headline might as well be “EU lives in LaLaLand.”

    Contrary to popular perception, cash and cash-like cards (e.g., debit cards) still rule in many countries. Rollout of contactless payment forms including its advanced forms like ApplePay, especially POS systems, are a work in progress. Germany, shockingly, is still a heavily cash-based economy. 

    The EU will probably stay stuck there for a while. 
    Europe is way more advanced in electronic payments than the US. EMV had what, a ten year advantage, over the the US in that field?

    Contactless payments were (and probably still are) far more widespread here than in the US and part of this EU investigation isn't so much about Apple Pay per se, than competition. That is, equal and fair use of NFC hardware.

    What consumers 'prefer' to use is a completely different story and simply a user preference. 

    My bank (BBVA) supposedly has the best banking App worldwide and I'm hard pressed to imagine what more I could need in terms of control of things like cards and transfers.

    For example, I've been able to 'suspend' my cards at will for as long as I remember. A very convenient feature. AI has long been used to evaluate my payment habits so if a payment is made for something that does not match a pattern of my habitual actions, it gets verified with me. My debit cards can also be used as credit cards. If something like an online purchase requires a code sent via sms, the App can even 'read' the sms to extract and use the code.


  • Reply 17 of 38
    avon b7avon b7 Posts: 6,437member
    “Competitors, such as banks and alternative payment methods, have argued that Apple Pay makes alternative payment services less attractive.“

    So Apple is guilty of inventing a superior technology competitors cant keep up with ...  there fore Apple has to share its intellectual property to help the competitions?
    Thats considered Pro-Innovation? What kind of Ludicrous reasoning is this...?
    Then I guess Tesla should share their intellectual property since VW cant match their  technology?

    Is  having a superior Technology considered  Anti Trust???

    Seems to me Europe's approach is one of desperation and totalitarianism.
    Apple Pay only exists because the banks allow it to exist. The problem is that Apple gets a cut of every transaction and 'denies' competing systems the opportunity to exist on iPhones through restricting access to NFC hardware.

    That clearly is a competition issue that needs investigating. It doesn't mean it will be ultimately found to hamper competition but could leave Apple open to knock on restrictions that it wouldn't like. I've mentioned these before but it could require Apple to make users fully aware of all 'lock in' aspects of Apple's hardware prior to purchase and for them to explicitly sign on to the notion. I can guarantee you that Apple would rather change its ways than be faced with that dilemma. 
    caladaniangc_uk
  • Reply 18 of 38
    avon b7 said:
    Ha ha ha. The headline might as well be “EU lives in LaLaLand.”

    Contrary to popular perception, cash and cash-like cards (e.g., debit cards) still rule in many countries. Rollout of contactless payment forms including its advanced forms like ApplePay, especially POS systems, are a work in progress. Germany, shockingly, is still a heavily cash-based economy. 

    The EU will probably stay stuck there for a while. 
    Europe is way more advanced in electronic payments than the US. EMV had what, a ten year advantage, over the the US in that field?

    Contactless payments were (and probably still are) far more widespread here than in the US and part of this EU investigation isn't so much about Apple Pay per se, than competition. That is, equal and fair use of NFC hardware.

    What consumers 'prefer' to use is a completely different story and simply a user preference. 

    My bank (BBVA) supposedly has the best banking App worldwide and I'm hard pressed to imagine what more I could need in terms of control of things like cards and transfers.

    For example, I've been able to 'suspend' my cards at will for as long as I remember. A very convenient feature. AI has long been used to evaluate my payment habits so if a payment is made for something that does not match a pattern of my habitual actions, it gets verified with me. My debit cards can also be used as credit cards. If something like an online purchase requires a code sent via sms, the App can even 'read' the sms to extract and use the code.


    The fact that you say you are "hard pressed to imagine what more I could need..." says it for me: unless you've used ApplePay on your iPhone or Watch, you will never understand the convenience and security. I am not saying you should use it, but rather that you have no idea unless you have.

    It is not about a "best banking app." There are plenty of those. All the features you mention in the last para are available in any banking app in the US, e.g., BoA, Chase, etc.
    tmaywatto_cobra
  • Reply 19 of 38
    avon b7avon b7 Posts: 6,437member
    avon b7 said:
    Ha ha ha. The headline might as well be “EU lives in LaLaLand.”

    Contrary to popular perception, cash and cash-like cards (e.g., debit cards) still rule in many countries. Rollout of contactless payment forms including its advanced forms like ApplePay, especially POS systems, are a work in progress. Germany, shockingly, is still a heavily cash-based economy. 

    The EU will probably stay stuck there for a while. 
    Europe is way more advanced in electronic payments than the US. EMV had what, a ten year advantage, over the the US in that field?

    Contactless payments were (and probably still are) far more widespread here than in the US and part of this EU investigation isn't so much about Apple Pay per se, than competition. That is, equal and fair use of NFC hardware.

    What consumers 'prefer' to use is a completely different story and simply a user preference. 

    My bank (BBVA) supposedly has the best banking App worldwide and I'm hard pressed to imagine what more I could need in terms of control of things like cards and transfers.

    For example, I've been able to 'suspend' my cards at will for as long as I remember. A very convenient feature. AI has long been used to evaluate my payment habits so if a payment is made for something that does not match a pattern of my habitual actions, it gets verified with me. My debit cards can also be used as credit cards. If something like an online purchase requires a code sent via sms, the App can even 'read' the sms to extract and use the code.


    The fact that you say you are "hard pressed to imagine what more I could need..." says it for me: unless you've used ApplePay on your iPhone or Watch, you will never understand the convenience and security. I am not saying you should use it, but rather that you have no idea unless you have.

    It is not about a "best banking app." There are plenty of those. All the features you mention in the last para are available in any banking app in the US, e.g., BoA, Chase, etc.
    I don't need to have used Apple Pay. 

    There is basically little to no difference between Apple Pay and and what I can use in making payments. What convenience are you talking about? 

    My phone has a TEE and offers very high security.

    My setup involves BBVA App, BBVA bank and often BBVA payment POV and processing gateways. All tied into my phone.

    You criticised the EU without a solid base. You attacked Germany and claimed Contactless was work in progress.

    What you are claiming with regards to the state of payment systems in Germany and the wider EU is false.

    You confused the German love of cash (a user preference) with what is available to them on a technological level. They are two very different things. The EU had a decade long headstart on the US in this case. 


    cropr
  • Reply 20 of 38
    Apple has a few approaches:
    1. Argue that it is not obligated to install other payment systems into iOS.
    2. Argue (if it's true, and I'm not 100% sure it is) that the would reduce the security of its Secure Element, and explain why
    3. Argue that if it did this, there would be an excessively long list of Payment options (WalMart Pay, Facebook Pay, Bank of America Pay, etc.) baked into iOS which would ruin the user experience
    4. Ask the EU if selling an iPhone with Android, which would allow access to the NFC chip, would constitute an "alternate" payment system, since the user could choose to install this OS
    5. Ask the EU if it's going to require selling all its services on any or all other platforms (Fitness+, Apple Music, etc.)
    6. Ask the EU if it would allow Apple Pay to be the default or if the EU would force Apple to let users select which payment system is the default
    7. Simply stop selling iOS devices in the EU, preferably in a surprise move with no stated return-to-market date. (Presumably the EU would allow existing iPhones in Europe to continue functioning, but if not, so much the better!)
    The first three options are just arguments. The second three options are questions that would force the EU to explain itself, although if the answer to #4 is yes, Apple could potentially do that with no impact on sales (perhaps a positive impact!) The last option is the nuclear option, and I love it. The point to option #7 is to get people on Apple's side. So Apple should remove iOS from their EU stores, for at least one year, until people realize that they need to fight their own governments. Some idiots would argue that Apple is "blackmailing Europe by not selling products there", but how can anyone force anyone to sell their products anywhere? Nobody can answer that question even remotely cogently. Each Apple Store in Europe should be shuttered, (unless Apple wants to continue selling Macs in Europe in stores) but at the front of each store there should be a display which says "The EU has banned the sale of iOS devices in Europe."
    edited September 2020 anantksundaramwatto_cobra
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