iPhone users in Germany can now use PayPal to make contactless payments in stores, a feature previously reserved for Apple Pay. This advancement, which makes Germany the first global market to benefit from this new feature, is quietly but profoundly transforming iPhone usage.
An opening forced by European legislation
This major development came about thanks to the Digital Markets Act (DMA), the European legislation that forced Apple to open parts of its iOS operating system to other companies in EU countries. Third-party apps can now access the iPhone's NFC module and secure element, allowing payments without using Apple Pay.
Although the Norwegian company Vipps was the first to exploit this opening nearly a year ago, the arrival of PayPal represents a considerable change in scale. Its international presence suggests a rollout of this feature at least on a European scale.
While the initial impetus came from regulations in the old continent, Apple announced last August its intention to open NFC transactions in the United States and other regions such as Australia, Brazil, Canada, Japan, New Zealand, and the United Kingdom, with other territories to follow. For now, this PayPal feature is only available on iPhone (not on Apple Watch) and only for Mastercard payments.
According to Jörg Kablitz, PayPal's Managing Director for Germany, Austria, and Switzerland: "The more technology evolves, the more obvious the benefits of digital payments become. Cash continues to play a role, but we know that many consumers and businesses are ready for innovative alternatives."
PayPal doesn't just offer contactless payments. The company is also rolling out several new features in Germany: a consolidated view of online and in-store purchases directly in the app; a split payment system, a first in Europe, allowing customers to pay for their in-store purchases in three, six, twelve, or twenty-four monthly installments; and a cashback program with bonuses that can be activated in the app when making contactless payments at many major German brands.
"This is PayPal's largest investment in product development for our customers in Germany," said Jörg Kablitz, who described the launch as historic.
Developers wishing to integrate this technology must enter into a commercial agreement with Apple and pay the associated fees, while requesting permission to use NFC and the Secure Element. Apple is also allowing businesses to use iPhone NFC readers to accept contactless payments in third-party apps, a feature PayPal began offering in Venmo and PayPal Zettle last March.
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