Wells Fargo's payments strategist weighs in on Apple Pay's NFC policy

In a general discussion about topics like mobile payments, faster processing and the growth of digital commerce, Wells Fargo's Ulrike Guigui came back to the iPhone and Apple's control over technology access several times. 

"It's a mobile app, not a wallet" on iOS, said Guigui, head of payments strategy for Wells Fargo. " 'Wallet' suggests an expectation of controlling the payment at the point of sale, which is not possible on iOS and the locked secure element." 

Apple is under fire in the European Union, which is investigating the technology company for potential antitrust violations because of its contactless payment policies for iOS devices. The EU investigation, while not complete, follows and accompanies years of global regulatory scrutiny of how Apple manages its payments business. Beyond the EU investigation, there are dozens of other investigations and lawsuits against Apple's payment policies. 

The investigations and suits generally fall into two categories.  One is Apple's requirement that developers use Apple's internal payment system to process App Store payments, with fees of up to 30%. 

The other is access to near field communication technology on Apple devices. Apple only allows issuers to enable NFC payments through its own Apple Pay wallet. That has been a point of contention for years, with a group of banks in Australia attempting to use collective bargaining to gain access to the NFC chip without going through Apple Pay — and being denied by Australian regulators.

"Apple has a fantastic user experience and has trust from consumers," Guigui said, adding that overall Apple has been a "great partner."  

"One of the ways it has earned that brand and trust is by making it extremely secure, so I understand Apple wanting to own the payment experience at the point of sale," Guigui said.

While not taking a position on Apple investigations in the EU and elsewhere, Guigui said easier access to mobile technology to support digital and contactless payments would create a better user experience without sacrificing security, which has advanced across the payment industry.

"The industry has come a long way and the time is right to allow everyone to access digital payments in the way that is the most convenient," Guigui said. "The consumers should have a choice about where they put their cards and how they collect rewards. Nobody says, 'I need a Chanel wallet to go shopping.' "

In addition to Apple Pay, Wells Fargo supports Google Pay. Google's Android operating system is more open, allowing third-party wallets such as Samsung Pay to make NFC payments — and Wells Fargo doesn't see any significant difference in fraud, Guigui said. 

Apple, which did not return a request for comment for this story, has argued the fees and policies for its App Store and devices are based on risk management, and that it does allow access to third parties.

"Apple will argue that it's already open in the sense that any card can be loaded into the digital wallet," said Marco Salazar, director of payments for Javelin Strategy & Research. And if Apple were to allow access to the iPhone's secure element for banks to build their own mobile wallets for iOS, there would likely be a lag in development as banks play catch-up, according to Salazar. 

"The bank disputes are more about negotiating the fee that Apple charges for access," he said.  Apple has made several concessions amid the regulatory pressure, such as lowering its transaction fees for smaller third-party developers to 15% from the typical 30%, and offering to be more open to developers in the Netherlands, which has fined Apple each month this year over payment policies for dating app developers.  

"There is a pressure for Apple to be more open, especially with the regulations," said Daniel Keyes, an analyst in the payments practice at Javelin. "Apple may not have a choice but to be more open with its payment policies. But it won't take a revenue opportunity away. It will hold out as long as it can."  

Guigui joined Wells Fargo in 2021 following a stint as head of  the payments consulting practice at Deloitte. She has also held executive roles at Mastercard and in retail cards at General Electric. 

In the past year, Wells Fargo has made several payments-related updates, including the launch of a new credit card that rewards users for on-time payments and an overhaul of its mobile banking app that includes improvements to how users transfer funds. 

The bank's upgraded Pay & Transfer feature organizes several payment products that support adding cards to digital wallets, including Apple Pay, Google Pay, Samsung Pay and PayPal. Other products include transfers, bill pay, access to the Zelle P2P payments network, wires and cross-border remittances. 

As Zelle's use cases expand, there are pilots that are testing Zelle's utility for payments over The Clearing House's RTP rail, such as paying for rentals.  For example, Wells Fargo recently announced a strategic partnership with the rental incentive marketing company Bilt Rewards and Mastercard to become the official issuer of the Bilt Mastercard, which allows cardholders to pay rent and earn loyalty points with no transaction fees on residential rental payments. 

Wells Fargo is also among the banks testing the pending FedNow real-time payment rail and has supported the RTP rail for more than three years.

"It's hard not to get excited about real-time payments," Guigui said. "It's like cash, only digital, so there's traceability and lots of data. It's better than other payment types. The future is 24/7/365."