• The EU is considering new laws that would require Apple to give third parties access to its devices’ NFC technology.
  • If Apple has to open access to its NFC technology in the EU, it’ll have to battle more heavily to win over new consumers.
  • Insider Intelligence publishes hundreds of insights, charts, and forecasts on the Payments & Commerce industry with the Payments & Commerce Briefing. You can learn more about subscribing here.

The European Union (EU) is reportedly set to consider new laws that would prohibit mobile device makers, like Apple, from restricting access to the NFC technology in their products, Bloomberg reports.

US apple pay proximity users

EU may remove Apple’s control of its NFC technology.

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The potential new rules follow the European Commission (EC) probing whether Apple was abusing its control of its devices by preventing third-party firms from using its NFC technology. Comparatively, Google enables third-party firms to access the NFC technology on Android devices, allowing other payments players to offer mobile wallets that can make contactless payments, just as Google Pay does.

Apple’s exclusive control of its NFC technology has come under fire before, but the EU may be set to deal Apple its most serious blow yet. Apple won a complaint against several major Australian banks that took issue with the company’s policy, and faces a recent law in Germany that would offer third parties access to its NFC technology. If the EU enacts rules that require Apple to share access to its NFC technology, it would impact its payments business in the whole region, and it’s possible other countries that have antitrust concerns about tech companies like Apple, such as the US, would follow suit.

If Apple has to open access to its NFC technology in the EU, it may be able to hold on to its existing users, but it’ll have to battle more heavily to win over new consumers.

Apple Pay has been available in multiple European markets for years, giving it ample time to build up loyalty that may not fade if other wallets add NFC capabilities. Apple’s mobile wallet has likely built up a sizable user base in the past few years in Europe since iPhones are popular in the region, comprising 24.3% of smartphone sales in Q4 2019 in France, Germany, Italy, Spain, and the UK, per Kantar—and it has been the only iPhone mobile wallet that could execute contactless payments.

If other wallets gain access to Apple’s NFC technology, those users may choose to stick with Apple Pay since they’re used to Apple Pay and any new wallets may be specific to an issuer or retailer, limiting their convenience compared with Apple Pay’s.

But Apple might face heated competition for new mobile wallet users, especially as the pandemic increases interest in contactless payments. There’s likely a huge swath of Apple device users who don’t yet use Apple Pay, considering there were over 1.5 billion active Apple devices worldwide at the end of 2019, offering room for growth for Apple Pay as well as competing digital wallets. 

And if third-party payments firms can enable contactless payments on iPhones, Apple Pay will be facing off with more formidable competition just as more iPhone users may be interested in adopting mobile wallets because of the pandemic, potentially cutting into its mobile payments market share. But because of Apple Pay’s established acceptance network, connection to Apple’s broader ecosystem, and ability to store cards from a variety of issuers and merchants, we expect Apple Pay to remain the clear leader in iPhone mobile payments even if it opens access to its NFC technology.

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