Apple has made a 10-year commitment to open the near field communication (NFC) capabilities in iPhones to outside developers for use in tap-to-pay mobile wallets starting July 25, 2024. The European Commission (EC), which proposes legislation in the European Union (EU) and conducts antitrust investigations in the 27-country bloc, has pursued Apple since June 2020 over its practice of denying access to iOS, the iPhone operating system.

It was the opinion of the EC that maintaining exclusivity over iOS was aimed at preventing third-party developers from launching mobile wallets that could compete with Apple Pay and was an abuse of Apple’s market power. Apple iPhones hold between 25% and 30% of the smartphone market in the EU. Android devices from multiple manufacturers account for most of the remaining smartphones in the region.

Apple will implement several new practices that will open iPhones to competing mobile wallets.

Those legally binding remedies include providing access to NFC functionality on iPhones at no charge to third parties. Mobile payments will operate using host card emulation (HCE) software embedded on the iPhones. This means that payment credentials will not be held on the iPhone’s secure element hardware, which is the case for Apple Pay transactions.

HCE was incorporated by Google into the Android operating system beginning in 2011. The software enables issuers to download an applet to a handset that emulates a physical card by requesting a primary account number or token when presented at a POS terminal. The request is sent from the point of sale to the issuer.

Apple has also committed to give third parties access to an iPhone’s Face ID, Touch ID or passwords for identity verification; the ability to set third-party digital wallets as default payment options; and the ability to launch third-party wallets using a double-click of the iPhone’s side button, as with Apple Pay.

Additionally, Apple will not prohibit third parties from combining NFC payments with digital IDs, transit cards, event tickets or other applications. Apple will also establish monitoring and dispute settlement systems for independent review of decisions that restrict access to NFC capabilities and has promised to shorten deadlines for resolving those disputes.

The remedies accepted by the European Commission apply to iPhones registered to owners in the 30 countries of the European Economic Area (EEA). Mobile wallet transactions initiated by those iPhones can occur anywhere in the world at an NFC-enabled POS terminal.

Compliance will be assured by a trustee appointed by Apple who will report to the EC for the 10-year period covered by the agreement.