Will the EU kill Apple’s fintech plans?

This morning, the European Commission released the initial findings of an antitrust case surrounding Apple Pay and third-party access to NFC technology on Apple hardware. The Commission has concluded that Apple unfairly prevents competitors from using NFC payments tech on Apple devices.

Why should we care?
This preliminary ruling may hamper Apple’s hardware-forward fintech strategy, which sees the company’s suite of devices as a promising path towards wider adoption of its in-house financial services. Earlier this year, Apple announced that it would let iPhones process credit card payments without additional hardware, which would make Apple directly compete with Square, while also boosting volume on Apple’s payments rails. The Apple Pay-NFC ruling released by European Commission suggests such a strategy may not materialize in the face of strengthening antitrust regulations in the EU. “Mobile payments play a rapidly growing role in our digital economy. It is important for the integration of European Payments markets that consumers benefit from a competitive and innovative payments landscape,” said Margrethe Vestager, Executive Vice President of the European Commission. Though Apple’s credit card payments strategy would only let iPhone users pay with Apple Pay, it might be forced to change that plan. The company may need to open up more of its hardware to competitors, which would make a hardware-forward financial strategy a double-edged sword, in which Apple Pay competitors, like Google Pay and Samsung Pay, would be able to tap into new market segments at the same time as Apple.