South Korea’s leading Fintech startups are set to file a petition with the Korean Fair Trade Commission (KFTC) against Apple for their violation of local laws on consumer protection. The group of companies includes award-winning NFC service provider Hankook NFC Co., KTB Solution and Interpay Co.

Various Fintech organizations like Korean Finance Association (KORFIN) believe that Apple’s NFC function limitation restricts external app developer’s access to its near field communication, which ultimately disallows Fintech start-ups and service providers in South Korea from providing NFC services to local consumers.

Apple iPhone 7’s API Lock-down

Apple’s new line of smart-phones such as the iPhone 7 and 7 plus explicitly enables Apple Pay to utilize its NFC functions, which prevents other external NFC-reliant services from operating on the smart-phone.

The API lockdown of Apple’s new smart-phones disallows South Korean iPhone users from accessing credit card applications, mobile payment platforms, and other Fintech services that they used on previous iPhones like the iPhone 6 and 6s.

“The companies have been in talks with consumer advocacy groups to overcome technical constraints in bringing the petition under the name of the association,” said KORFIN chairman Lee Seung Gun. “Due to Apple’s closed policy, consumers should not be deprived of opportunities to enjoy various Fintech services.”

Hankook NFC, the largest NFC service provider in the country, heavily criticized Apple’s restriction on its NFC functions, claiming that South Korean consumers have the right to utilize local payment applications like the users in the United States.

“Consumers have rights to enjoy NFC-based services but Korean consumers cannot use the services even though they purchased the same type of iPhones as those in the U.S. and this is a nonsense,” said Hwan Seung-ik, CEO of Hankook NFC.

Integration of External Applications

While Apple has locked down its NFC functions, it has integrated alternative payment applications into its iMessage application, enabling a wide range of users to utilize a variety of payment services like Circle’s Bitcoin payment and trading platform.

Instead of encouraging developers to design external Fintech services, Apple decided to integrate a handful of applications that have been approved and verified by the Apple development team directly into its system.

If Apple fails or denies complying with the ruling of KFTC, serious consequences may be imposed on iPhone distributors in South Korea.