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You pay regularly with your iPhone? You will soon be able to use a service other than Apple Pay. Starting in March, iPhone users will theoretically be able to make contactless payments using third-party apps, without being forced to use Apple Pay exclusively. This development marks a significant opportunity for financial institutions, although it comes with many conditions.
This announcement from Apple follows a European directive occurring in a context where the Digital Markets Act, adopted a year ago, aims to regulate the activity of the giants of the digital in Europe. Apple, for example, will be obliged from March to offer alternative stores to its App Store. Apple's decision to open access to its NFC (Near Field Communication) technology to developers of banking applications and digital wallets is therefore seen as a victory for the European Commission.
Not something to get excited about either. As for sideloaders(alternative stores to the iPhone), Apple has thought of everything to maintain its technological lead. If the possibility of using the NFC antenna for payments via third-party applications is a notable advance, the limitation imposed by Apple concerning access to its ’ ;#8220;secure element” — a key component guaranteeing the security of transactions — requires banks to develop their own security solutions. A complex challenge requiring colossal investments. Also, most banks will have to evaluate whether the commissions taken by Apple on the use of Apple Pay are more costly than creating a proprietary security system.
User experience at the heart of concerns
This undoubtedly explains the mixed reception of this news in the banking sector. On the one hand, this decision gives banks a chance to reach a wider and potentially wealthier clientele, accustomed to mobile payments. On the other hand, the lack of access to the “secure element” of&# 8217;Apple and the need to offer a user experience at least equivalent to that of Apple Pay raise questions about the viability and attractiveness of alternative solutions.
Indeed, ease of use and security are crucial factors for the adoption of these new payment methods by consumers. The user experience, in particular, is a critical point.
Apple Pay has attracted a wide audience thanks to its seamless integration into the ecosystem Apple, allowing fast and secure payments from a simply double-click the side button of the iPhone or Apple Watch. Banks and other application developers will face the challenge of replicating such a simplified and enjoyable user experience. The question also arises for payments via Apple Watch outside of Apple Pay, a functionality whose future remains uncertain in this new framework.
Despite everything, European banks and fintechs, such as EPI with its pan-European instant payment solution Wero, could seize this opportunity to innovate and offer new payment experiences to iPhone users. The European Commission has opened the floodgates. It’s up to mobile payment players to seize an opportunity to shine. Mission Impossible?
- Starting in March, iPhone users in Europe will be able to make contactless payments through third-party apps, instead of exclusively through Apple Pay
- Apple makes however, the use of complex and costly alternative solutions by cutting off access to its security system
- Mobile payment players must also imagine a way to offer a user experience as simple and fluid as Apple Pay, a major challenge
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