Instead of third-party developers handling their contactless transactions through Apple Pay or Apple Wallet, new NFC and SE APIs will enable developers to offer consumers contactless transactions for in-store payments, car keys, house keys, hotel keys, enclosed transportation, corporate IDs, student IDs, merchant loyalty and rewards cards, and event tickets. Government IDs will be supported in the future.
“Because user security and privacy are of paramount importance to Apple, this new solution is designed to provide developers with a secure way to offer contactless NFC transactions from within their iOS apps. The NFC and SE APIs leverage the Secure Element – a certified industry-standard chip designed to securely store sensitive information on the device. Apple has committed significant resources to develop a solution that protects user security and privacy and leverages a range of Apple's proprietary hardware and software technologies, including Secure Enclave, biometric authentication, and Apple servers, during contactless transactions.” – Apple
To perform a contactless transaction in an app using the NFC and SE APIs, you can open the app directly or set it as the default contactless transaction app in iOS settings. Once you do that, double-click the iPhone's side button to initiate a transaction. The process sounds the same as using Apple Pay or Apple Wallet, except you're performing the contactless transaction through a developer's app.
Apple was originally pushed to open its NFC payment platform to third-party app developers by the EU's Digital Market Act (DMA), but Apple decided to open the feature in other markets as well. And by building the new NFC and SE APIs for third-party developers, those developers can bypass Apple Pay and Apple Wallet entirely. This should stop the EU from claiming Apple still has control over contactless transactions for third-party developers.