EU Apple Contactless Third-Party Payments

Yes, as of iOS 17.4, Apple allows third-party payment apps and banking apps in the European Union to use the iPhone’s NFC chip for contactless payments, ending Apple’s exclusive access to Apple Pay. This change, required by the EU’s Digital Markets Act, lets developers offer their own contactless payment services directly from the iPhone without routing through Apple Pay or paying Apple’s fees.

Background: The Digital Markets Act and Apple’s Response

The European Union’s Digital Markets Act (DMA), which came into force in March 2024, designates Apple as a “gatekeeper” for its iOS operating system, App Store, and Safari browser. One of the DMA’s key requirements is that gatekeepers must allow third parties to interoperate with core platform services—including NFC technology used for contactless payments. Apple had previously restricted NFC access to Apple Pay, arguing it was necessary for security and user experience. Under regulatory pressure and facing potential fines of up to 10% of global turnover, Apple announced in January 2024 that it would open NFC access to third-party developers in the EU, and the change shipped with iOS 17.4 in March 2024.

How It Works: NFC Access and Host Card Emulation

Developers in the EU can now use the iPhone’s built-in NFC chip to perform contactless transactions. The key technology is Host Card Emulation (HCE), which allows an app to emulate a contactless card without relying on a secure element inside the phone. Instead, the app’s server handles the payment credentials, and the NFC chip communicates with the payment terminal. Apple provides a framework called NFC & Secure Element that lets developers access the NFC controller for payment and non-payment use cases. Users can set a third-party app as their default contactless payment app in iOS Settings, so double-clicking the side button opens that app instead of Apple Pay.

Eligibility and Requirements for Developers

To use the NFC entitlement, developers must meet specific criteria:

Be a registered developer in the European Economic Area (EEA).
Hold a valid license or authorization to provide payment services in the EEA (e.g., as a payment institution or bank).
Enter into a commercial agreement with Apple, which includes a fee structure.
Comply with Apple’s security and data protection requirements.

Apple has stated that it will review each application to ensure it meets the criteria. The process is not open to all developers; it is aimed at established payment providers and banks.

Impact on Users and the Payment Landscape

For EU users, this means more choice in how they pay contactlessly. For example, a bank’s app could offer its own tap-to-pay feature, potentially with different loyalty programs or fee structures. It also enables new types of payment apps, such as those that aggregate multiple cards or offer crypto-based payments. However, the practical impact may be gradual, as banks and payment providers need to develop and test their own NFC payment solutions. Some banks have already launched or announced support, while others are still evaluating the costs and benefits.

Common Misconceptions and Potential Issues

One common misconception is that third-party NFC access means any app can read your credit card data. In reality, the NFC chip only communicates with the payment terminal when the app is active and the user authenticates (e.g., with Face ID or a passcode). Another misconception is that this change is global; it is only available in the EU. Potential issues include:

Compatibility: Some older payment terminals may not support HCE-based payments, though most modern terminals do.
Default app confusion: Users may accidentally have multiple payment apps installed, leading to prompts at the terminal.
Security concerns: While HCE is secure, some users may worry about storing payment credentials in apps rather than in Apple’s Secure Element.

Apple has implemented safeguards, such as requiring user authentication for each transaction and limiting NFC access to the foreground app.

Comparison with Apple Pay

Apple Pay remains the default and most integrated payment method on iPhone, with deep integration into the system, including Safari, Wallet, and the side button. Third-party apps may offer different features, such as:

Custom loyalty integration
Support for payment methods not available in Apple Pay (e.g., certain local payment networks)
Different fee structures for merchants (which could lead to savings passed to consumers)

However, Apple Pay is likely to remain the most convenient option for most users due to its seamless integration and wide acceptance.

Frequently Asked Questions

Do I need to do anything to use third-party NFC payments?

No, the change is automatic with iOS 17.4. If you have a compatible app installed, you can go to Settings > Wallet & Apple Pay > Default Wallet App to choose a different default. Otherwise, Apple Pay remains your default.

Is this available outside the EU?

No, Apple has limited this NFC access to the European Economic Area. In other regions, Apple Pay remains the only NFC payment option on iPhone.

Will third-party payments work with all contactless terminals?

Most modern contactless terminals support HCE, but some older or proprietary terminals may not. In practice, acceptance is similar to Google Pay on Android, which also uses HCE.

Is it safe to use third-party NFC payment apps?

Yes, as long as you use reputable apps from licensed payment providers. Apple has security requirements, and the apps must authenticate you for each transaction. However, always download apps from the App Store and check the developer’s legitimacy.

Will Apple still charge fees for these payments?

Apple charges developers a fee for the NFC entitlement, but this is not the same as the merchant fees Apple Pay charges. The fee structure is not publicly detailed, but it is a one-time or annual fee for developers, not per-transaction for users.

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