Dutch regulator calls for extra EU rules to ensure payment app access to smartphone NFC technology

The Netherlands Authority for Consumers and Markets (ACM) is calling for amendments to current European Union legislation in order to ensure companies such as Apple provide payment apps with access to a smartphone’s NFC chip to give users a choice of in-store payment methods on their device.

Netherlands Authority for Consumers and Markets (ACM) logo)

The call comes as ACM completes its investigation into whether restricting access to a device’s NFC chip constitutes a breach of competition rules. It says that the investigation “confirms the previously identified anti-competitive concerns on the Dutch market for payment apps”.

“However, the Interchange Fee Regulation (IFR), the European rules on the basis of which ACM conducted this investigation, is not suitable for alleviating these anti-competitive concerns in the Netherlands. That is why ACM is in favour of additional European rules.”

“ACM’s investigation has revealed that access to NFC technology is an important prerequisite for market participants to invest in the development of payment apps of their own,” the regulator adds.

“This is because consumers are already able to pay in brick-and-mortar stores using this technology: it is already installed in payment cards.

“Since market participants such as banks are not given access to this technology on smartphones, they have not started developing or even stopped developing payments apps of their own.

“As a result thereof, consumers and retailers have fewer methods of payment to choose from.

Extra regulation

“ACM examined whether the IFR offered sufficient options to tackle this problem by mandating access to NFC technology on smartphones. This turned out not to be the case.

“The IFR can only be used if there is a choice between different payment apps. That choice currently does not exist in the Netherlands.

“In other countries, where competitor payment apps do exist, the IFR may be applied.”

Among the changes ACM is now calling for are amendments to the EU’s Payment Services Directive II (PSD2) and the introduction of a Digital Markets Act to mandate smartphone manufacturers and other technical service providers to offer access to technologies such as NFC.

“Amending existing rules and introducing new rules will create a level playing field for payment app providers,” ACM says.

The European Commission launched its own antitrust investigation into “whether Apple’s conduct in connection with Apple Pay violates EU competition rules” in June 2020 and said it was stepping up that investigation in May this year.

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