Apple will soon allow developers to integrate in-app NFC contactless transactions by using the Secure Element on iPhone devices. Up until now, NFC capabilities on iPhones were mainly restricted to Apple Pay, with stringent controls over its usage. However, the upcoming iOS 18.1 update will provide developers access to NFC and Secure Element (SE) APIs, enabling them to incorporate contactless transactions directly within their apps.
The expanded functionality will be applicable to a variety of uses, including in-store payments, digital keys for vehicles and homes, transit passes, corporate identification badges, and event tickets. Additionally, Apple mentioned that support for government IDs would be added in the future.
The Secure Element, a certified chip that meets industry standards, will securely store sensitive data on the device. The transaction process will also utilize other Apple technologies, such as the Secure Enclave and biometric authentication, to ensure robust security for users.
In a Forbes article, David Birch commented that this development is significant because opening up this hardware will revolutionize both digital payments and digital identity ecosystems. He noted that the SE is tamper-resistant hardware, similar to mobile SIM cards and chip-and-PIN cards, and developers can use it to manage the cryptographic keys that are crucial to online security.
Jay Meier from FaceTec echoed this sentiment in an online post, acknowledging that unlocking the cryptographic module to store various credentials is a smart move. However, he also warned that the biometric information stored on an iPhone is “not bound to verified identity data anywhere and can be replaced with someone else’s biometric data using the PIN.”
Regardless, Apple’s announcement suggests the company is preparing for the increased adoption of government-issued virtual IDs. This news coincides with California’s recent decision to expand its mobile driver’s license program to include both Apple and Google digital wallets.
Users will be able to initiate transactions either by opening the relevant app directly or by setting it as their default contactless app, which can be accessed by double-clicking the iPhone’s side button.
However, these new capabilities won’t be available to all developers without restriction. Developers will need to enter into a commercial agreement with Apple, apply for the NFC and SE entitlement, and pay associated fees. This ensures that only authorized developers who meet specific industry and regulatory standards can utilize the technology, while also providing Apple with a new revenue stream.
This move also helps Apple comply with a recent settlement with the European Commission, where the company agreed to open its contactless payment system as part of an antitrust action.
Initially, the APIs will be available in select countries, including the U.S., U.K., Canada, and Japan, with plans to roll them out more widely in the future.
Sources: Ars Technica, Apple, Forbes, StateScoop
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August 17, 2024 – by Ali Nassar-Smith
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