Which payment service provider does Apple use

Is the Apple Pay monopoly falling on the iPhone? - These are the facts and the background

Will Apple also have to disclose and make available its NFC interface in the payment area to other payment service providers in the future? A new law that implements an EU directive could soon ensure that, for a change, it is the banks and financial service providers themselves who insist on compliance with the PSD2 directive. - UPDATE: The draft law passed the Bundestag on Thursday and was adopted with the votes of the coalition parties as described in the article.

Apple Pay has been present on the German market for almost a year - extremely successfully, because even the savings banks, who were initially against the system with their hands and feet, have now realized that customers are demanding Apple Pay. And in fact, in addition to Google Pay, Apple Pay in particular has ensured that mobile payment is also becoming more and more widespread in Germany. A nuisance for many payment providers, however, is Apple's attitude towards not making the iPhone accessible to other services, at least on the basis of the NFC chip. But that is exactly what could change soon.

Because the NFC-based procedure, which works in combination with a physical or virtual credit card, could soon also be opened up to other providers. The finance committee passed a bill yesterday that could impose on Apple in the future to make Apple Pay more open or even to implement other NFC-based services under iOS. It is unclear whether the name, which is hardly subject to amusement tax, is responsible for the fact that someone is only now caring about what it says there. In any case, it is a regulation with which the federal government could ensure more competition between banks and savings banks, financial service providers and FinTechs and, last but not least, the digital corporations, especially Apple.

Does Apple have to open its NFC interface?

Actually, it is mainly about a passage that causes stomach ache for those responsible for Apple: According to this, it can be summarized that the technical providers called system companies (i.e. Apple) should ensure that other, third-party payment service providers provide the infrastructure service for a fee that has yet to be negotiated be able to use - comparable to the lines that Telekom has to make available to Internet providers for a fee. The payment service provider should be put in a position to conduct its payment transactions unhindered.

A company that contributes to the provision of payment services or to the operation of the e-money business in Germany through technical infrastructure services (system company) is obliged, at the request of a payment service provider (...), to provide these technical infrastructure services for a reasonable fee immediately and using appropriate access conditions to provide. The provision within the meaning of sentence 1 must be designed in such a way that the requesting company can provide or operate its payment services or e-money transactions unhindered. "

From the bill

When Apple goes to the Chancellery

So paying via iOS and iPhone no longer just for Apple Pay? So that it doesn't come to that, not only did Apple knock at the Chancellery, but according to information from the Handelsblatt, the US embassy also got involved. This is unusual even by US standards, but it shows that the coalition that voted in favor of the draft would do well if it passed the whole thing quickly and did not allow itself to be influenced by lobbying.

Speaking of lobbying: the banks and insurance companies are also likely to be involved in the whole story. As you can hear, the argumentation for the banking world is quite unusual - albeit conclusive and comprehensible: After all, it is the banks in particular that have been asked for interfaces as part of the PSD2 process, and the other companies to query and execute account balances of payments made possible. Of course, the BigTechs from America’s wild west cannot be granted the same rights that the banks have just taken away. A remarkable argument on the part of the banking industry, which has been resisting it with hands and feet for years, but is now rightly demanding the opposite.

This is how Apple could defend its pay monopoly on the iPhone

For Apple, the shame is now big: The company is of course trying to prevent such a legal regulation - and could theoretically even pull the ripcord to the effect that it will close Apple Pay in Germany without further ado. Nobody wants it, especially not the banks and savings banks that have just conquered the system with a lot of effort. But if the law actually comes out as the coalition now envisions, Apple has several options: On the one hand, the company can negotiate long and tenacious about what a fair remuneration would be in return for third parties. This is a process that took years, almost a decade, in the context of DSL access, for example.

In addition, it is of course legitimate to ask whether access must be via the NFC interface or whether a more cumbersome solution, for example based on QR codes, will meet the requirements. From a technical point of view, the virtual version of Apple Pay is likely to be affected in addition to the iPhone and Apple Watch, since this is also a technical infrastructure. And, last but not least, Apple can of course argue that locking the NFC interface is the only way to establish adequate security and move the whole thing to Brussels. Linked to this would then be the declaration of unreasonableness for Apple, which, however, will not necessarily have a suspensive effect.

According to an Apple spokesman, they were surprised at how quickly the bill got on the table.

We are happy to work with the federal government to make the technical background of Apple Pay understandable and we will continue to work closely with the supervisory authorities in the EU. "

An Apple spokesman for the Handelsblatt

Banks welcome the draft - equal rights for all

Sounds between the lines like that you want to explain everything to the Federal Government that it does not understand, and even want to work with it, but not with Parliament, which has to rule on this. Otherwise, however, they apparently prefer to discuss something like that at EU level - and not just with stubborn Germans.

The security concerns that Apple is facing, however, do not seem credible in view of the fact that the German banks are strictly regulated and a strict legal review of the draft has been carried out, which is said to have led to the lengthy back and forth in the finance committee. The digital industry association Bitkom, to which Apple is also a member, speaks of a "quick hack process" and criticizes that the legislature is deeply interfering with freedom of contract and business models.

The German banking industry, on the other hand, welcomes the initiative as a "step in the right direction:

Access to technical interfaces is a key competitive factor for payment systems today. It is important that the same framework conditions apply to all market participants - regardless of whether they are large platform providers or banks and savings banks. "

Statement by the Deutsche Kreditwirtschaft DKtw

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