Apple Cracks Open the Door to iPhone NFC, SE

Apple will soon allow developers to offer in-app NFC contactless transactions using the Secure Element on its iPhone devices. Previously, NFC functionality on iPhones was largely limited to Apple Pay, with strict controls over its use. But in the planned iOS 18.1 operating system update, developers will gain access to NFC and Secure Element (SE) APIs, enabling them to integrate contactless transactions directly within their apps.

The functionality will extend to a variety of applications, including in-store payments, digital keys for cars and homes, transit passes, corporate badges, and event tickets—with “government IDs to be supported in the future,” Apple said in a statement.

The Secure Element, an industry-standard certified chip, will store sensitive information securely on the device. The transaction process will also leverage other Apple technologies, such as the Secure Enclave and biometric authentication, aiming to ensure a high level of security for users.

Commenting on the move in an article for Forbes, David Birch argued that Apple’s move “is huge because the opening up of this hardware will transform both the digital payments and the digital identity ecosystems: the SE is tamper-resistant hardware, the same kind as your mobile phone’s SIM and on your chip and PIN cards, and developers can use it to manage the cryptographic keys that power our online lives.”

Another industry expert, FaceTec’s Jay Meier, agreed in an online post that “opening the cryptographic module to store various credentials is smart,” but cautioned that the biometric information stored in an iPhone is “not bound to verified identity data anywhere and can be replaced with someone else’s biometric data using the PIN.”

In any case, Apple’s announcement clearly signals the tech giant’s anticipation of the rise of government-issued virtual IDs. And the announcement comes just as the government of Apple’s home state of California has announced the expansion of its mobile driver’s license program to include the Apple and Google digital wallets.

To initiate a transaction, users can either open the app directly or set it as their default contactless app, accessible by double-clicking the side button on their iPhone.

Access to these new capabilities will not be freely available to all developers. Those interested will need to enter into a commercial agreement with Apple, request the NFC and SE entitlement, and pay associated fees. This ensures that only authorized developers who meet specific industry and regulatory standards can use the technology, while opening up a new stream of revenues for Apple.

It also helps Apple to comply with its recent settlement with the European Commission, in which it agreed to open up its contactless payment system as part of an antitrust action.

The APIs will initially be available in select countries, including the U.S., U.K., Canada, and Japan, with plans for broader global availability in the future.

Sources: Ars Technica, Apple, Forbes, StateScoop

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August 16, 2024 – by Cass Kennedy and Alex Perala