Apple could soon face new restrictions on how it controls contactless payments on iPhones in the UK, as the Competition and Markets Authority (CMA) pushes for wider access to its NFC technology and significantly lower fees for third-party developers.
The regulator has outlined proposals that would require Apple to make its contactless technology available to more businesses on fairer commercial terms. According to the CMA, Apple’s current fees and restrictions are making it difficult for UK fintech companies to develop competing payment services, despite the growing popularity of digital wallets.
The CMA pointed to the European Union as an example of what greater access could achieve. Just six months after Apple agreed to open up its NFC technology for payments in the region, Norwegian payment app Vipps launched an alternative to Apple Wallet, followed by services from PayPal, Klarna, Curve and BBVA.
Meanwhile, no competing wallet-style product has launched in the UK, even as contactless payments now account for 39% of all transactions, compared with just 3% a decade ago. More than 60% of UK adults also use digital wallets, with Apple Wallet remaining the most popular.
Under the proposals, Apple would need to support both Secure Element (SE) and Host-based Card Emulation (HCE), two technologies used for contactless transactions. SE stores sensitive payment information on the device, while HCE allows it to be stored elsewhere.
Apple currently offers only SE access in the UK, but the CMA argues that supporting both would make it easier for businesses to introduce services already available in Europe without creating inherent security risks.
The regulator also wants Apple’s NFC access fees to be substantially lower, although it won’t set the prices directly. Beyond payments, the changes could allow developers to introduce more digital services, including identity verification, car and hotel keys, workplace passes, tickets and loyalty programmes.
Apple has pushed back against the proposals, warning that the changes could weaken privacy and security protections. Speaking to Reuters, a company spokesperson said Apple would continue engaging with the regulator to find an outcome that benefits users.
The proposals are part of the UK’s Digital Markets, Competition and Consumers Act 2024, under which Apple has been designated as having Strategic Market Status for its mobile platform. The consultation closes on 17 November, with the CMA expected to make a final decision after reviewing the responses.
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