Apple’s next antitrust battle is over contactless payments like Apple Pay. More specifically, this is about access to the iPhone’s and Apple Watch’s NFC chip (near field communications). Currently, iPhone and Apple Watch users must use Apple Pay if they want to pay for something via contactless payment.
Near Field Communication (NFC) enables devices within a few centimeters of each other to exchange information wirelessly.
Apple’s policy means PayPal and Square—as well as financial institutions like Chase, Citi and American Express—can’t launch tap-to-pay iPhone apps with their own features and interface. It also means if they want to access the iPhone user base, they must pay an up-to-0.15% fee for every Apple Pay credit card transaction.
The European Union is now throwing its weight into the fight by making a formal antitrust complaint…
Apple says its insistence on reserving tap-to-pay capabilities for Apple Pay isn’t about money, but rather about privacy and security. The company says that opening up NFC could harm its system and pointed to a report from 2016 that said NFC access on Android has been compromised by hackers.
It’s hard to believe that the user experience and security are the only elements being considered here, though. Chief Executive Officer Tim Cook said during the Epic Games trial that even if Apple were to open up its payment system, the company would still ask developers to pay a commission retroactively.
MacDailyNews Take: This is Apple’s platform. It cost blood, treasure, sweat, and tears to build it and it costs significant investments to maintain, innovate, and grow the platform. Apple’s operating systems and first-party apps are provided to users for free. Revenue therefore is derived from the commerce that Apple created and continues to enable. If developers don’t want to pay a commission, they don’t have to participate.
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