PayPal Enables NFC iPhone Payments in Germany Following EU Apple Mandate

The German tech site iPhone Ticker reports that German iPhone users are beginning to report that they may now utilize PayPal’s tap-to-pay capability at in-store payment terminals which enables contactless payments at physical retail terminals that take Mastercard. Due to the EU’s mandate that Apple make iPhone NFC chips available for third-party contactless payments under the Digital Markets Act, PayPal announced the new feature earlier this month. 

Similar to Apple Pay, PayPal may be utilized for NFC tap-to-pay capabilities, with payments being made in the same manner. By utilizing the side button to activate PayPal as a payment option for one-tap contactless payments in retail establishments, PayPal customers in Germany can make PayPal the default payment app instead of Apple Pay.

Smartphones that have NFC (Near Field Communication) technology can perform contactless payments. Building on a similar expansion in the US last September, this launch is the first time PayPal’s tap-to-pay capability is accessible on iPhones in Germany.

The PayPal app can be used to make contactless payments if PayPal is not selected as the default payment option.

PayPal also started accepting contactless payments via its Venmo and Zettle services on iPhones in 2023. PayPal introduced cashback rewards and linked its debit card with Apple’s mobile wallet in the United States.

According to iPhone Ticker (by machine translation), PayPal’s contactless wallet is currently only compatible with iPhones and is only compatible with terminals that accept Mastercard payments. Source says nearly a year after Apple first declared last year that it will be allowing third-party wallet apps for EU users to use its NFC hardware, a Norwegian payment app named Vipps became the first to capitalize on Apple’s evolving ecosystem in December.

The action reflects PayPal’s continuous attempts to increase its share of contactless payments, especially in Europe, where new opportunities have been made possible by regulatory reforms.

The debut comes after a major change brought about by the Digital Markets Act of the European Union, which forced Apple to make its iPhone NFC chip available to outside developers, PayPal is able to provide direct tap to pay alternatives in Germany. In the past, Apple only allowed its own Apple Pay app to use the NFC chip, preventing other payment apps from doing the same for in-store transactions.

Apple announced in August last year that it would allow developers to offer in-app NFC-based payments in the US and other regions as well. In addition, Apple has opened iPhone tap-to-pay to the EU and permitted businesses to use iPhone NFC readers to accept contactless payments in third-party apps, a feature that PayPal began implementing in Venmo and PayPal Zettle in March of last year.

The Verge said that PayPal had previously announced the capability earlier this month. However, the new service is only available on iPhones; Apple Watches are not included.

The new rules allow third-party apps from banks and payment firms to utilize the NFC chip’s full capability, providing iPhone customers with an alternative to Apple Pay and the Wallet app.

PayPal’s initial test market is Germany, but in the upcoming months, other European nations are probably going to join the rollout. German iPhone users will require a suitable debit or credit card and the most recent version of the PayPal app in order to utilize PayPal for contactless payments. Retail establishments that accept Mastercard payments can use PayPal.

PayPal’s tap-to-pay features are only available on the iPhone; the Apple Watch is not able to use the feature since Apple has not been compelled to enable NFC on the device. Until those nations enact comparable legislation compelling Apple to increase NFC access, PayPal will not be able to introduce contactless payments to the US or other nations.

PayPal is introducing cashback discounts in the PayPal app to entice users to switch from Apple Pay. In the future, the company plans to implement a pay over time feature that would allow users to make purchases in six, twelve, or twenty-four monthly instalments.