Apple NFC access on the iPhone 6 was initially restricted to Apple’s own services, preventing third-party developers from taking advantage of the device’s new contactless capabilities. The strategy mirrored Apple’s earlier handling of Touch ID, which debuted with access limited to functions such as device unlocking and iTunes purchases before eventually becoming available to outside developers.
For mobile payments providers, however, restricting the NFC antenna had significant competitive implications. Third-party payment apps such as PayPal, Softcard, and Google Wallet could target iPhone users but could not provide the same NFC tap-and-pay experience available through Apple’s own payment ecosystem. That gave Apple substantial control over how iPhone owners could make contactless payments at the point of sale and strengthened the position of Passbook as the primary interface for in-store mobile payments.
An Apple spokesperson confirmed that access to the NFC antenna within the iPhone 6 will not be extended to third party developers for use in their app. This is similar to Apple’s initial approach to Touch ID, which was restricted to Apple’s own apps. Touch ID was later opened up to app developers, it remains to be seen whether the same will happen with NFC.
The move is similar to the Touch ID sensor’s debut on the iPhone 5s last year, as Apple restricted its use to iTunes purchases and device unlocking. However, Apple announced at this year’s Worldwide Developers Conference that developers would be able to integrate Touch ID into their iOS 8 apps. It is possible that Apple will allow NFC to be used with third-party apps at some point in the future, however it appears that the company is focused on polishing the technology for use with its own services.
For now this certainly means that 3rd party payment apps such as PayPal, Soft Card (formerly ISIS), and Google Wallet that are targeting iOS consumers will not be able to integrate the ‘tap and pay’ capability that the NFC-enabled iPhone 6makes possible. For iPhone users, this means that Apple’s Passbook will become their go-to app for completing mobile payments in-store.
Apple NFC access represented more than a technical decision—it helped determine which mobile payment providers could compete for transactions on the iPhone. By reserving NFC functionality for its own services, Apple gained an important advantage as consumers began experimenting with smartphone-based contactless payments.
The experience with Touch ID also raised the possibility that Apple could eventually open NFC capabilities to third-party developers. Such a change would significantly expand competition among mobile wallets and payment apps while giving iPhone users greater choice in how they make contactless payments.
Overview by Nikhil Joseph, Analyst, Emerging Technologies Advisory Service for Mercator Advisory Group.com
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