The Netherlands Authority for Consumers and Markets (ACM) today announced an investigation into contactless platforms on smartphones and the access that payment apps have to NFC capabilities.
According to the ACM, the software that’s on some smartphones “only allows the developer’s own payment app to connect to NFC communication,” preventing third-party payment apps from also being able to use NFC capabilities.
Apple is not specifically mentioned in the press release, nor are any other smartphone manufacturers, but on iPhones, Apple Pay is the only payment method able to use NFC. Apple does not permit other financial apps to use NFC, which has resulted in disputes with some banks and financial institutions.
In Australia, for example, banks petitioned the Australian Competition and Consumer Commission in an effort to negotiate with Apple over Apple Pay. The banks wanted open access for the NFC function on the iPhones. The bid was not successful and NFC continues to be restricted to Apple Pay on Apple devices.
The Netherlands Authority for Consumers and Markets says that limiting NFC on smartphones “may stifle innovation with respect to payment apps” as well as reducing freedom of choice for consumers and businesses.
The ACM plans to investigate whether limiting the payment apps’ access to NFC does indeed reduce freedom of choice, and if that is indeed the outcome of the investigation, there could be a penalty, such as a fine.
As Bloomberg points out, Apple Pay is also under investigation by the European Commission to determine whether Apple’s terms, conditions, and other measures related to the use of Apple Pay distort competition and reduce choice and innovation. The EC too is concerned that Apple Pay is the only mobile payment solution able to access NFC functionality for payments on Apple Devices.