Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
PayPal’s role in EU Antitrust complaint about Apple Wallet
Mac Rumours | Juli Clover | May 3, 2022
Apple Pay competitor PayPal played a role in the EU's decision to target Apple with antitrust complaints about its mobile wallet, reports Bloomberg. PayPal was one of "multiple companies" that filed informal complaints about the way Apple restricts third-party apps from accessing the NFC capabilities of the iPhone, which in turn led to the European Commission issuing a Statement of Objections against Apple.
The European Commission believes that Apple is unfairly limiting access to the NFC chip, preventing PayPal, Venmo, banks, and other payment services from offering features that are equivalent to Apple Pay, which in turn limits the mobile payment options that iPhone users have access to in stores.
See: Lawmakers Take Aim at Big Tech with Push for Sweeping Overhaul of Antitrust
No third-party apps are able to access NFC on the iPhone, so Apple Pay is the only tap to pay payment method available. Apple claims that the restriction is designed to safeguard user privacy and security, but it will now face an EU 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.
PayPal has an Apple Pay-like tap to pay option that's available to Android users, and the company wants to be able to offer a similar feature on the iPhone. Such a feature would require PayPal to use the NFC chip in the iPhone, but it is not able to do so with Apple's current restrictions.
See: Ipsos Survey: Most Canadians Say (88%) We Need More Competition
Apple does have plans to allow third-party apps to use the NFC chip for the upcoming "Tap to Pay on iPhone" feature that will allow compatible iPhones to accept payments through Apple Pay, contactless credit and debit cards, and other digital wallets with no hardware required, but it is not equivalent to the tap to pay Apple Pay equivalent that PayPal is after.
Forum Comments from Both Sides:
I have to side with PayPal on this, it is not really right that Apple added a hardware feature into the phone that only Apple applications can access and use. It is my device, I should have the choice in what tap to pay options that I can use with NFC.
That's like being upset that you can't use your Visa card to pay with Amex.
Apple didn't invent NFC. They added it to the iPhone as a feature and then restricted the use of it.
Rubbish. They didn't add "NFC" as a feature and then restricted the use of it. "NFC" was never once advertised as a feature of the iPhone. What was advertised was ApplePay and Apple Wallet with the ability to handle contactless payments via NFC.
What right does the EU have - or any other body, for that matter - to dictate to a private company which parts of their products must be accessible to the public? Should the EU force car makers to provide public APIs to all vehicle functions and all sensors? Etc., etc.
Why does the EU need to get into the middle of this at all? If Apple's refusal to create a public API to its NFC chip and mobile payment apps such as PayPal can't provide NFC payments on iOS, then consumers that value PayPal can vote with their wallets and buy an Android device! Let the free market decide these things!
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