Apple to let third parties use iPhone’s NFC in iOS 18.1
Probably threatened with some bans, Apple has recently announced that it will let third-party developers access iPhone's NFC chip. The lock will be removed in iOS 18.1. This means more freedom with contactless payments, in the first place – it won’t be Apple Pay or nothing anymore – but the implications actually go further than that. This change turns the iPhone into a keychain of sorts: you’ll be able to store hotel keys, all sorts of electronic passes, and even car keys in the device, plus all the loyalty cards you have.
While Apple certainly loses some of its earnings, using the iPhone’s NFC will come at a cost to developers, who will have to enter into a commercial agreement with Apple, request the NFC and SE entitlement, and pay the associated fees.
Apple’s hold on iPhone’s NFC chip
Apple has been gradually opening up the iPhone's NFC over the years. In 2019, the company announced that it would obey the European Digital Markets Act and let apps there use the chip. The current move probably has a similar incentive behind it: regulatory pressure. Plus, likely, the increasing competition with Android-powered phones, where NFC has been accessible for app developers for a long time.
What are the implications of the move for Apple and the mobile payments ecosystem in general? First off, as mentioned above, the Cupertino company loses a slice of the pie it’s always considered proprietary. This may entail a desire to compensate in some other way, so we can expect higher prices for Apple services in the future. Secondly, though, the liberation of the iPhone’s NFC chip will drive transaction costs down, because this is how competition works. This means that some prices may actually go down, even if a little bit.
Overall, for us, the users, monopoly is a bad thing, but Apple is a special case here: maybe it’s exactly the protectionism that enabled the company to develop truly disrupting technology and products that we enjoy today. We’ll see how it will turn out with NFC. Stay tuned!
