Nailed-down iPhone: European Central Bank demands access for digital euro

In order to avoid a cartel fine, Apple has held out the prospect of opening up the iPhone to other payment services in the European Economic Area. The European Central Bank (ECB) is now intervening in this process, arguing that the steps proposed by the iPhone manufacturer so far do not go far enough. Apple's proposals "fall short" and cannot ensure a "true level playing field" for payment providers, criticized Piero Cipollone, member of the ECB's Executive Board.

ECB: Digital euro needs access to Secure Element

In two open letters addressed to both the EU Commissioner for Competition, Margrethe Vestager, and the Commissioner for Internal Market and Services, Thierry Breton, Cipollone welcomes the Commission's approach, but at the same time points out shortcomings in Apple's implementation plans. At the center of the criticism is the fact that Apple does not want to give access to the iPhone's security coprocessor – called Secure Element –. Instead, other payment services are to use Host Card Emulation (HCE) for payments via the NFC wireless interface. However, this puts them at a disadvantage in terms of user-friendliness and speed, explains Cipollone.

In addition, there is no guarantee that future payments with the digital euro will be "smooth and user-friendly on iPhones". Access to the Secure Element is particularly crucial for offline payments.

According to the ECB, Apple's planned implementation has other shortcomings, such as the convenient payment with the Apple Watch in stores being left out - as well as the huge segment of online purchases. Direct digital payments from iPhone user to iPhone user are also "completely excluded", although this is essential for the digital euro. Cipollone also refers to the planned EU regulation for the introduction of the digital euro and insists on the required access to "NFC antennas and secure elements".

Apple should allow other wallets on the iPhone

The secure element is a special chip integrated into the iPhone on which Java applets are executed - for contactless payment systems, for example. To dispel accusations of distortion of competition in Europe, Apple proposed in January to open up the iPhone's NFC interface further. So far, only Apple Pay or the Apple Wallet can access it for contactless payments - in future, this should also be possible for other wallets. Observers expect the EU to decide on Apple's proposals in May.

(lbe)