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

[bsolar]

I don’t agree here. For Apple, Germany is currently a smaller market than say Australia, they can totally afford to take the hit by pulling Apple Pay put of the German market.

I don't see this happening, but even if it happens, it would risk escalating the issue. Germany has much weight in the EU and as stated the EU is already investigating Apple Pay. If Apple pisses-off Germany it might find itself at the wrong end of EU regulations: then the choice is to comply or forfeit a market of 500M people...

To me it's clear that the EU frowns at anti-competitive practices and considers Apple's locking of the NFC capabilities on their devices anti-competitive: the question is only whether the current anti-competitive legislation is enough for them to act, or the EU needs something new. Likely it's the latter and Apple pissing-off Germany could easily be what triggers it to happen.

 

[Abazigal]

I am reminded of the fortnite fiasco with android. Epic forced android users to download a third party installer (thereby compromising the security of their device) for no reason than because they could. Conversely, they had to go through the iOS App Store because there was no other choice, meaning iOS users were spared this nonsense.

I guess therein lies the irony of choice. The problem comes when more choice doesn’t give me more of what I want, but instead saddles me with more problems to contend with.

As for opening the NFC chip to other parties, the upside is that more payment options are available, but it may also mean that banks now have even fewer incentive to support Apple Pay in favour of their offerings, which can suck if you do genuinely prefer Apple Pay.

I also think when people extol the virtues of more choice and options, they forgot that people like myself are iOS users precisely because we don’t care so much about that sort of thing. When I buy into the Apple ecosystem, I know I am giving up choice in exchange for a singular, integrated solution, the benefits of which promise to be more than what I gave up. If anything, this is what gives Apple leverage in this sort of negotiations - us users.

I am sure that were I running an European bank, I would probably be singing a different tune, but I don’t, and I guess that’s the point. Everyone is just looking out for themselves.

 

[kmann1983]

why would anyone even want to use anything other than Apple Pay?

Simply, your credit union doesn't support it yet.
Why anyone would use an actual bank is beyond me though.

 

[lartola]

why would anyone even want to use anything other than Apple Pay?

Well I’m sure people whose card issuer doesn’t support apple pay would still like to be able to pay with their iphone using the issuer’s own app. And the same goes for all iphone owners who live in countries where, it seems at this point, Apple will never launch Apple Pay at all such as Mexico or South Korea.
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Yea, sure good luck with that. They are messing with the core functionality of the device and they have no right to do so... they will take it back

No they’re not and you’re confusing apples with oranges. The NFC chip is NOT part of the core functionality of the device, nor is any of apple pay core functionality (proof of this is that Apple completely disables apple pay via software on devices set up for unsupported regions). The NFC chip just a tiny radio transmitter/receiver used to send and receive payment information and also other information (such as workout data with gymkit). As such, it shouldn’t be any security risk for Apple to allow 3rd parties access to it for transmitting payments from their apps. The secure element, where apple pay card information is stored and could certainly pose a security risk if accessed by 3rd parties, is an entirely different chip and access to it can and should still remain locked if and when access to the NFC chip is opened up to 3rd parties.

 

[lartola]

What even is the incentive for users to install a third-party NFC wallet?

The closest thing I can think of is mobile payment systems in China but they use randomized QR codes, not even close to NFC.

The lack of support for Apple Pay from the user’s card issuer. Or the unavailability of Apple Pay in the user’s residence country.
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Yea, sure good luck with that. They are messing with the core functionality of the device and they have no right to do so... they will take it back

No they’re not and you’re confusing apples with oranges. The NFC chip is NOT part of the core functionality of the device, nor is it any of apple pay (proof is that Apple completely disables it via software on devices set up for unsupported regions). The NFC chip just a tiny radio transmitter/receiver used to send and receive payment information and also other information (such as workout data with gymkit). As such, it shouldn’t be any security risk for Apple to allow 3rd parties access to it for transmitting payments from their apps. The secure element, where apple pay card information is stored and could certainly pose a security risk if accessed by 3rd parties, is an entirely different chip and access to it can and should still remain locked.

if they don't support Apple Pay, they don't support any phone payment as far as I see... all Apple Pay is is a way to use your credit card of choice without having the physical card on you. its not like there's some other factor for choice

There are two exceptions to that rule: Samsung and LG. Their payments work at places where the other phone payments don’t because they can communicate with the terminal’s magnetic stripe reader.
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This is just going to lead to a mess of having to install 57 different apps to be able to pay at all the stores using NFC.

Why the fork can't these companies just get on board with Apple Pay? It's based on an open standard (Contactless payments) and is plenty secure. It's frustrating to need to install a bunch of different apps to pay for things.

It doesn’t have to be a mess. All stores using NFC readers can accept all forms of contactless payment. The customers simply choose one to use and that’s it. They don’t have to install 57 different apps to pay at all the stores using NFC, where did you get that erroneous idea? stores can’t individually block some forms of contactless payment in favor of others (i.e., they can’t, for example, accept Google Pay but block Apple Pay, it’s both or none).

 

[lartola]

I think you're confusing the secure enclave and NFC. NFC has been opened. The secure enclave has not (to my knowledge).

NFC has been opened for everything but 3rd party payment apps, that’s the issue here. And don’t anyone underestimate the German authorities. They’ve made Apple budge before, such as when they forced Apple to sell the original iphone unlocked instead of locked up with exclusivity for one carrier like they did in the US and some other countries.

 

[Lalatoon]

I am reminded of the fortnite fiasco with android. Epic forced android users to download a third party installer (thereby compromising the security of their device) for no reason than because they could. Conversely, they had to go through the iOS App Store because there was no other choice, meaning iOS users were spared this nonsense.

I guess therein lies the irony of choice. The problem comes when more choice doesn’t give me more of what I want, but instead saddles me with more problems to contend with.

As for opening the NFC chip to other parties, the upside is that more payment options are available, but it may also mean that banks now have even fewer incentive to support Apple Pay in favour of their offerings, which can suck if you do genuinely prefer Apple Pay.

I also think when people extol the virtues of more choice and options, they forgot that people like myself are iOS users precisely because we don’t care so much about that sort of thing. When I buy into the Apple ecosystem, I know I am giving up choice in exchange for a singular, integrated solution, the benefits of which promise to be more than what I gave up. If anything, this is what gives Apple leverage in this sort of negotiations - us users.

I am sure that were I running an European bank, I would probably be singing a different tune, but I don’t, and I guess that’s the point. Everyone is just looking out for themselves.

Specially Apple

 

[adamus]

‘trade war’

 

[laz232]

„Not all merchants support Apple Pay“ :

Yes, they do.

Every NFC-enabled POS can handle Apple Pay UNLESS it is disabled by choice.

EU dislikes not being able to track your purchases -> taxes

?
WTF - sales tax has been able to be successfully levied for decades on sales performed with cash transactions, your assertion that this has something to do with tax collection is FUD.

 

[bsolar]

WTF - sales tax has been able to be successfully levied for decades on sales performed with cash transactions, your assertion that this has something to do with tax collection is FUD.

Not claiming it's related with Apple Pay, but the reality is that cash payments are indeed used to evade taxes and authorities would very gladly move to a cashless, fully trackable payment society for this reason among others, like e.g. making money laundering more difficult.

Considering tax evasion, a cash payment is not automatically trackable, so it can only be taxed if reported. In some countries, it's actually quite widespread to under-report, meaning that some actual sales of goods or services are never reported to the tax authorities or reported with less-than-real figures, so from the point of view of the tax authority they never happened and thus will never get taxed, or they get taxed only in part.

Common practices by authorities to combat this are e.g. to try to limit cash transactions and cash use in general, e.g. by making illegal to make payments for goods or services in cash above a certain amount, or limiting cash withdrawal. Usually they are not very successfull, since the underlying issue in those countries is that taxes are quite high, so the incentive for tax evasion is also quite high.

 

[Ballis]

Hopefully German efforts pay off and the NFC chip is finally opened up. Cant wait to use alternatives

 

[DailySlow]

Why would anyone want to use anything other than apple apps.
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Apple isn't as good at security as google. Android phones can handle google pay and Samsung pay at the same time.

Your point?
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I can remember when that was an issue is the United States - that you couldn’t use another bank’s ATM for free. It used to annoy me because I chose my bank based on it’s ATM network, despite its crappy crappy interest rates. So I had no sympathy for people with accounts at smaller banks with two branches (but higher interest rates) started complaining about ATM fees that my bank would levy for using their ATMs.

Ummm, just a point here, on ATM fees...if you use a credit union, most work with 7-Eleven ATMs free of fee. Transfers also work from there. Thank heaven for... OK I’ll stop there. But it’s a win win.

 

[Larsvonhier]

Because not all merchants support it - isn’t that sort of obvious?

It´s not the missing merchants´ support, but banks. Some major banks here in good-ol´Tschö do not support apple pay. Postbank, Sparkasse, Volksbank just to name a few. On the other hand, whereever you can pay with NFC cards you can automatically pay with Apple pay as well. Almost everywhere, that is.

 

[ericwn]

why would anyone even want to use anything other than Apple Pay?

Why would anyone argue against having options?

 

[GalileoSeven]

The EU and any incompetent legislators who threaten the security of my data (all because they're likely getting bribed under the table) can go pound sand.

This is definitely a slippery slope. Knowing the EU, they definitely wont stop at the NFC chip

 

[ericwn]

Dear Bundestag, i demand to be able to use my debit card from HypoVereinsBank to withdraw money from my citibank account.
also, how anticompetitive is that i can withdraw money from an ATM of a different bank only if i pay 5-10EUR extra fee?
no one wants to regulate that?

Look I found two other issues that upset me more so you addressing the first one is really making me upset.

 

[ericwn]

Yes. This. If Apple’s implementation creates a bad user experience, the market will punish them. And if users want to use other payment methods, there are ample options out there. Don’t need government micro management of software implementation.

I am under the impression it’s only a standard of it can be applied across the board. The same regulations for all devices.

 

[bsolar]

Dear Bundestag, i demand to be able to use my debit card from HypoVereinsBank to withdraw money from my citibank account.
also, how anticompetitive is that i can withdraw money from an ATM of a different bank only if i pay 5-10EUR extra fee?
no one wants to regulate that?

The EU is actually working on this.

In a SEPA for cards, a number of impediments would be abolished, including: (i) a lack of interoperability between cards and terminals, (ii) limitations on merchants accepting certain cards, and (iii) cardholders being confused by different payment experiences across Europe.

Also noteworthy their stance on tokenisation, which is one of the main security features of more modern payment systems (including Apple Pay) where instead of providing the primary account number to validate the transaction they provide every time a different one-time token.

As a result, the Eurosystem:
- notes that it is important that all card schemes support tokenisation, including by third party processors

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The EU and any incompetent legislators who threaten the security of my data (all because they're likely getting bribed under the table) can go pound sand.

This is definitely a slippery slope. Knowing the EU, they definitely wont stop at the NFC chip

Making the NFC capability available to third parties does not necessarily threaten the security of your data though. Furthermore, if it actually does, those "incompetent legislators" actually envisioned exceptions which would make Apple exempt.

 

[alphaod]

I'm waiting for the law that requires Apple to allow me install Android on my iPhone and forces Apple to allow iOS to be installed on any Android device.

 

[weckart]

The EU and any incompetent legislators who threaten the security of my data (all because they're likely getting bribed under the table) can go pound sand.

This is definitely a slippery slope. Knowing the EU, they definitely wont stop at the NFC chip

I believe the standard response here would be that you are free to ditch Apple and use another maker's phone.

 

[lartola]

The EU is actually working on this.

Also noteworthy their stance on tokenisation, which is one of the main security features of more modern payment systems (including Apple Pay) where instead of providing the primary account number to validate the transaction they provide every time a different one-time token.

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Making the NFC capability available to third parties does not necessarily threaten the security of your data though. Furthermore, if it actually does, those "incompetent legislators" actually envisioned exceptions which would make Apple exempt.

Exactly, people who claim it does are confusing the NFC chip with the secure enclave chip where payment info is stored, which is a different chip.
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I don't see this happening, but even if it happens, it would risk escalating the issue. Germany has much weight in the EU and as stated the EU is already investigating Apple Pay. If Apple pisses-off Germany it might find itself at the wrong end of EU regulations: then the choice is to comply or forfeit a market of 500M people...

To me it's clear that the EU frowns at anti-competitive practices and considers Apple's locking of the NFC capabilities on their devices anti-competitive: the question is only whether the current anti-competitive legislation is enough for them to act, or the EU needs something new. Likely it's the latter and Apple pissing-off Germany could easily be what triggers it to happen.

It reminds me of back in the early 2000s, when in the US wireless carriers had absolute control of the devices. They were the only ones who sold cellphones to customers either directly or through authorized resellers, and had their logos all over the phones and even on the boot up and shut down screens when the phone was turned on or off. Each carrier locked up all its phones to its own network and would not unlock under any circumstances, so it was impossible to switch carriers without buying a new phone. And while Americans were ok with all of this and some even defended the wireless carriers, just as they are now doing with Apple locking up the NFC on iphones, Europeans fought against it with the EU passing laws to prohibit wireless carriers from locking any phones. Thanks to these laws, in 2007 Apple was compelled to sell the original iphone unlocked in European countries while they were selling it locked up (with no way to permanently unlock it) and with exclusive activation rights for one carrier in the US (AT&T). And eventually, all the US carriers had to open up to unlocking phones and therefore surrendering some control of the devices to the end users. So in the end, it’s not always bad that the EU frowns on some practices that they consider could hurt the consumers.

 

[falainber]

I am reminded of the fortnite fiasco with android. Epic forced android users to download a third party installer (thereby compromising the security of their device) for no reason than because they could. Conversely, they had to go through the iOS App Store because there was no other choice, meaning iOS users were spared this nonsense.

I guess therein lies the irony of choice. The problem comes when more choice doesn’t give me more of what I want, but instead saddles me with more problems to contend with.

As for opening the NFC chip to other parties, the upside is that more payment options are available, but it may also mean that banks now have even fewer incentive to support Apple Pay in favour of their offerings, which can suck if you do genuinely prefer Apple Pay.

I also think when people extol the virtues of more choice and options, they forgot that people like myself are iOS users precisely because we don’t care so much about that sort of thing. When I buy into the Apple ecosystem, I know I am giving up choice in exchange for a singular, integrated solution, the benefits of which promise to be more than what I gave up. If anything, this is what gives Apple leverage in this sort of negotiations - us users.

I am sure that were I running an European bank, I would probably be singing a different tune, but I don’t, and I guess that’s the point. Everyone is just looking out for themselves.

What about fortnite on Android was a fiasco. Doing it differently from iOS certainly does not qualify as fiasco.

 

[GalileoSeven]

I believe the standard response here would be that you are free to ditch Apple and use another maker's phone.

So are the idiots in the EU advocating for this garbage

 

[Whathappened]

Freedom of choice is great, even if Apple Pay is the best choice right now. It creates competition and drives innovation.

There is Android out there and many other paying options working with the same checkout terminals as Apple Pay does.
Apple as a manufacturer is offering an option for their customers, that’s all or isn’t it?
I just hope it is possible to put in another nfc chip in future iPhones so I keep the option to only share my data with the company I chose (Apple) and no one else will be able to access the same chip.

 

[bsolar]

I just hope it is possible to put in another nfc chip in future iPhones so I keep the option to only share my data with the company I chose (Apple) and no one else will be able to access the same chip.

Your data is not in the NFC chip: it's in the Secure Enclave. Allowing apps to access the former doesn't necessarily mean they also have to access e.g. your Apple Pay data on the latter.