Germany Passes Law Forcing Apple to Open Up iPhone's NFC Chip to Apple Pay Rivals, But Loophole May Exist

[Alan Wynn]

The law would not prevent users to stick with Apple Pay if they so wish.

If banks choose not to participate in Apple Pay should the government force them to do so? Should the government also decide all the rates so that a bank cannot try to charge too much and thereby prevent Apple for signing a deal? Or is this concern only one way, against Apple (the company with among the highest customer satisfaction ratings) and in favor of the banks (companies with about the lowest customer satisfaction ratings?

This would only be an issue if payment terminals start to discriminate applications, e.g. blocking some apps or only accepting others, "forcing" users to forfeit this or that app to pay at this or that merchant. The EU has already on its agenda to make such arbitrary limitations illegal though, since they intend NFC payments to be standard.

That is just one problem. If Apple was required to allow Chase access to their device, what incentive do they have to also participate in Apple Pay?

Furthermore, what if the "one app" sucks or is limited compared to what competitors offer, or has different features? It's s true that choice is a double-edged sword, but so is lack of choice.

You keep talking about “lack of choice”, but what you mean is that you want the government to make user experience, security and development choices for the companies building these products. I am not sure what you think, but I think Apple does a much better job of that the TSA app or my local DMV.

 

[Costino1]

I have no idea if this is a good idea or not in particular but it’s asinine that we can’t get all of these tap to pay providers working on all tap to pay devices.

The future is not “everybody having their own locked down solution”

I agree. Too many options is killing the industry. Look at the streaming services: Netflix, Hulu, Disney+, ESPN+....it's becoming more costly than cable.

Also the home assistants. Google, Siri, Amazon....its too polluted. Excited to see one thing win and reign it all. Its the rare time a monopoly helps the consumer. Just like HD-DVD vs Blu-Ray...Beta vs VHS....

 

[I7guy]

You may disagree but it is reality. A government uses law, justice system and prison system to enforce its regulation. I think I get why you disagree, because you are coming from a reality where the government is largely democratic but think about other forms of government like monarchy or a government under martial law or government like China which is largely totalitarian.

I am not sure what you mean about safety and security, this has nothing to do with NFC security but about Apple Pay competition. Because if its about safety and security on NFC then Apple would not allow other apps access to it. Remember all other apps can use NFC on the device except those that use it for contactless payment.

Safety and security refers to property and citizens. Not NFC. I don't agree government should meddle with the design choices of tech companies. That's what voting with your wallet is all about.

 

[Alan Wynn]

It seems that the artificial limitations on consumer options are still welcome to some.

This is not a choice of more consumer options vs. fewer consumer options, it is a choice of decisions being made by consumers as to what trade offs they want to make vs. those choices being made from them by someone else, limiting their actual choices.

Here’s to valuing a corporation before the population. Are we at a keynote already? lol

You mean ”Here’s to valuing one big corporation over another and not letting the customer decide at all.”

In the current situation consumers can choose what Apple offers with its focus on security, privacy, an integrated ecosystem and uniform user experience, or they can pick what Android offers - more choices, less expensive hardware, a less integrated ecosystem, etc..

You want to eliminate one of those choices, not to benefit the consumer, but to benefit the big banks that want to force their customers to use their apps with the (most likely) horrible user experience.

As it is now, we have choice as consumers, in your world we do not.

 

[bsolar]

If banks choose not to participate in Apple Pay should the government force them to do so? Should the government also decide all the rates so that a bank cannot try to charge too much and thereby prevent Apple for signing a deal? Or is this concern only one way, against Apple (the company with among the highest customer satisfaction ratings) and in favor of the banks (companies with about the lowest customer satisfaction ratings?

If banks collude to boycott Apple Pay, that's definitely an antitrust violation. If all banks individually decide Apple Pay is not a good deal for them... maybe Apple Pay actually is not a good deal for them, which means no antitrust violation.

As I mentioned already, the EU regulators have already stated they want to regulate card payments, which would definitely impose limitations on banks. EU regulators did so already with SEPA, proving they are totally fine with regulating against bank's interests.

Furthermore, again, it's not at all a given that all banks want to boycott Apple Pay or push for their own payment app on Apple devices.

That is just one problem. If Apple was required to allow Chase access to their device, what incentive do they have to also participate in Apple Pay?

Winning customers which, even given the option, still want to use Apple Pay instead.

You keep talking about “lack of choice”, but what you mean is that you want the government to make user experience, security and development choices for the companies building these products. I am not sure what you think, but I think Apple does a much better job of that the TSA app or my local DMV.

That's definitely a potential drawback, but it's not necessarily a negative. First of all, in the German regulation in the article there is the option to be exempt if the regulation being applied would compromise the system's security: the goal is clearly limited to stop artificial anticompetitive practices, not technically motivated design choices and the regulators had the foresight to implement this safeguard.

Furthermore, regulations can and have forced companies to implement changes which have been a major plus for consumers which would have not ben implemented otherwise, or at least not so speedily, e.g. EU personal data protection regulations, SEPA payments, removal of roaming tariffs... The EU has stated the intention to make tokenisation mandatory for all card payments, which would guarantee improved payment security for everyone.

I admit they did also blunder, like the misguided cookie notification regulation...

But in general, yes, I do want the government to make user experience, security and development choices for companies if it goes toward the best interest of consumers.

 

[manu chao]

I see a great deal of harm. It means that things have to be less well integrated and more complicated.

I don’t see any harm in outlawing Apple from blocking Spotify.

It makes Apple spend resources that may or may not benefit their customers, in an effort to aid their competitors.

What resources does Apple need to spend to let Spotify run on iPhones?

The "concept of antitrust regulation" can be applied to anything the regulator wants. When Amazon controlled 90% of the electronic book market, Apple was the company that the regulator decided was violating the rules.

So because a regulator might have made a wrong call once in regard to Apple, it should cut Apple some slack in another, rather unconnected situation?

Spotify like to make it clear they have the majority of the users and that they are growing faster. It does not seem to me like Apple has prevented them from being the market leader.

So the way to keep a check on Spotify from becoming too big, Apple should be allowed to block them? While this might work to some degree, it cements an oligopoly where two players simply divide the market between themselves (not a perfect oligopoly since Apple Music would still be available on Android). Whether that is really better for consumers than forcing Apple to allow Spotify is highly questionable.

 

[ericwn]

This is not a choice of more consumer options vs. fewer consumer options, it is a choice of decisions being made by consumers as to what trade offs they want to make vs. those choices being made from them by someone else, limiting their actual choices.



You mean ”Here’s to valuing one big corporation over another and not letting the customer decide at all.”

In the current situation consumers can choose what Apple offers with its focus on security, privacy, an integrated ecosystem and uniform user experience, or they can pick what Android offers - more choices, less expensive hardware, a less integrated ecosystem, etc..

You want to eliminate one of those choices, not to benefit the consumer, but to benefit the big banks that want to force their customers to use their apps with the (most likely) horrible user experience.

As it is now, we have choice as consumers, in your world we do not.

I believe there are more use cases than favouring one bunch of banks. NFC can be a practical token in everyday life, tap in or out on the train for example.

User experience? Please. If I need to go by my user experience in music,news, tv solely i wouldn’t be an Apple customer at all anymore. They are all offering gigantic room for improvement to say the least.

 

[ZeuSGoKiL]

I believe there are more use cases than favouring one bunch of banks. NFC can be a practical token in everyday life, tap in or out on the train for example.

User experience? Please. If I need to go by my user experience in music,news, tv solely i wouldn’t be an Apple customer at all anymore. They are all offering gigantic room for improvement to say the least.

Room of improvement indeed , one more crucial thing is that the technology offers by Apple does not quite match the pricing of the norm.

There are still a lot of technology out there thats cheaper ermmm did it all came from China ....

 

[PBMB]

A little reading will do wonders for your sight.

This is what I did before posting. I read Apple's own page about it and it was very clear that using a phone for payments is more complex than just getting out a card and touching a terminal.

 

[PBMB]

I live in Singapore actually. I am curious to know why the points I raised are not as relevant in Europe? Is it because cash is still king there, or the terms offered by credit cards aren't as attractive?

There are many little shops that serve everyday needs, where you pay either by cash or lately (but still not everywhere) by debit card. In some countries, like Germany which represents the biggest individual part in European economy, cash is still by far the king.

I mean, just anecdotally, when I shop at a bookstore at a shopping centre I frequent, payment involves me first bringing up my membership card via an app (for the 10% discount), then paying via Apple Pay (bypassing the need for a signature with a credit card), and finally scanning a membership app (which applies to purchases made at any store at that shopping mall). I know, it sounds crazy.

There is no such thing like app for membership here. Loyalty cards are either physical or electronic in the sense of a record in the shop's system based on your name and e-mail address.
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Not everywhere. Card issuers in countries such as the US and Mexico still issue more non-contactless chip-only cards than contactless cards.

That explains a lot. Thank you.

 

[bobob]

I don't see how a debit card is less secure during transactions.

A little reading will do wonders for your sight.

This is what I did before posting. I read Apple's own page about it and it was very clear that using a phone for payments is more complex than just getting out a card and touching a terminal.

And what did your reading tell you about the differences in security?

 

[bsolar]

And what did your reading tell you about the differences in security?

Apple's page on Apple Pay doesn't provide this information: it details how Apple Pay works, not how it compares to e.g. directly using a card form the payment transaction's security point of view.

The main security feature of Apple Pay is tokenisation, but a modern card which uses the EMV standard also uses tokenisation for NFC payments, so they are actually comparably secure.

The big security gap is between those newer methods and e.g. magnetic swipe or (lol) signature.

 

[V_Man]

I would love to be able to use the nfc for anything I want. But security would be compromised.

 

[IGI2]

So with an iPhone I shouldn’t be able to use it as a token or use nfc for anything but Apple Pay? What a wonderfully silly idea. Neither me nor the majority of other customers bought iPhone in the know of this restriction.

Pointing to other manufacturers and say go there is hardly a professional solution. The chip can easily be used for more than it is and it’s not for reasons only Apple know.

Microsoft had to open their system to let other browsers in. Nobody told these people to just buy a Mac if they want a different software.

Provide options is the customer friendly approach.

What are you talking about?

I use NFC in a lot of configurations bought off AliExpress for cents (literally) for HomeKit automations.

I was just referring to payments. Right now, it's open as it should be. I can buy cheap NFC tags for home automations, I can tap and go in London Tube, and I can pay in the most secure way using Apple Pay.

Nothing constraining here.