Apple Allows Third Parties to Use Its Payment Chip for the First Time

Apple has decided to permit third parties to use the payment chip in iPhones to conduct financial transactions,
opening the door for banks and other service providers to compete with Apple Pay.

Topic
Details

Details

This announcement, made yesterday, follows years of pressure from regulatory bodies,
including those affiliated with the European Union.
Apple stated that developers will be able to utilize this chip starting with the upcoming iOS 18.1 update.
The chip relies on Near Field Communication (NFC) technology to exchange data when the phone is close to another device.

This update will allow external service providers to use the chip for in-store payments, transportation costs,
work badges, home and hotel keys, and reward cards.
Apple also plans to add support for government ID cards in the future,
enabling users to set a third-party payment app as the default option instead of Apple Pay.

Apple has been cautious about allowing developers access to the chip due to security concerns.
This change could also impact the revenue Apple earns from Apple Pay transactions,
as the company receives a share of all payments made through iPhones.

According to the released statement, Apple will require developers to pay associated fees to use the chip and to enter into a commercial agreement.
Apple aims to ensure that only “certified developers who meet specific industry and regulatory requirements and adhere to ongoing security and privacy standards” will have access to the system.

Apple plans to launch this program in several countries, including Australia, Brazil, Canada, Japan, New Zealand, the United States, and the United Kingdom. However, the company did not mention the European Union, which has been strongly advocating for this feature in recent months.

Apple Allows Third Parties to Use Its Payment Chip for the First Time

Apple Allows Third Parties to Use Its Payment Chip for the First Time

Related Topics