iPhone Users Can Now Make Contactless Payments Through Third-Party Wallets: Apple Pay Monopoly Ends

• Traditionally, if you had an iPhone, Apple Pay was your only online payment option. Not anymore, though.
• Following a probe from EU's antitrust regulators, Apple has decided to allow third-party digital wallets on iPhones.
• The changes will come into effect by July 25 and will stay in place for the next 10 years. Users will also have the option to choose which wallet they want to set as default.

Apple users in the EU will no longer be limited to using Apple Pay for making contactless payments through their phones.

If the company was found to be violating antitrust regulations, it would be facing a massive fine of up to 10% of its global annual turnover.

This decision was made after the EU antitrust regulators opined that Apple might be restricting competition by not allowing other mobile wallets to work on iPhones.

To avoid this, it decided to allow third-party payment apps on its platform, bringing the 4-year long investigation to an end.

Once everything is set in place, the users will have the option to choose which wallet they want to set as default.

So from now on, these third-party platforms will get access (free of charge) to iPhone's standard contactless payment technology known as near-field communication (NFC).

Apple has until July 25 to implement the changes, which will stay in place for at least 10 years across 30 countries in the European Economic Area.

Users of Apple Pay and Apple Wallet can continue using those services. There will be no changes to them after the investigation.

How Does the EU Commission Feel about Apple's Decision?

The decision to allow this-party payment apps addresses the preliminary concern in its antitrust investigation against Apple. So naturally, the authorities are pleased with this move.

iPhone users will (now) be able to use their preferred mobile wallet for payments in stores... while enjoying all the iPhone functionalities, including double click, tap-and-go, and Face ID." - EU's competition chief Margrethe Vestager

She also added that this change will only be implemented on iPhones - Apple smartwatches have been excluded. That's because the number of people who use smartwatches to make payments is too small to limit competition and it isn't doing much harm to Apple's rivals.

A Brief History of the Investigation

The EU Commission launched a probe into Apple Pay in 2020. The preliminary investigation was focused on the terms and conditions that the company sets for integrating Apple Pay in apps and websites as well as the tap-and-go technology.

By 2022, the authorities came to the conclusion that since no app other than Apple Pay is available to iPhone users, it can limit competition in the digital wallet industry.

This goes against the antitrust regulations of the EU. Then, Apple was notified about this finding which resulted in multiple commitments from the company to address this issue.

Finally, in January, it first spoke of allowing third-party digital wallets in its iPhone ecosystem. While this might not be the best news for Apple, it will certainly benefit customers, who will now have more options to choose from, and digital payment companies who will have a whole new group of consumers to cater to.

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