Apple Pay faces contactless crackdown in UK: New rules could change iPhone tap-to-pay and pave way for NFC rivals
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- UK government wants more Apple Pay alternatives for consumers
- Proposes opening the technology to other companies
- He also wants Apple to charge lower fees for access.
If you pay for an item using contactless technology on any of the best iPhones, you’re stuck with Apple’s way of doing things. But the UK government’s competition regulator, the Competition and Markets Authority (CMA), is proposing new rules that could open up the way you pay with your iPhone.
According to a press release on the UK government website, the CMA believes that “Apple’s fees and rules are preventing fintechs and other UK businesses from innovating and growing” and that the proposed changes are “expected to result in substantially lower access fees, which will help make it commercially viable for more businesses to innovate and compete.”
The CMA noted that there are no rivals to Apple Pay in the UK, unlike in the EU where several alternatives can be used. The CMA believes this is due to both the high fees charged by Apple and the restrictions imposed on certain technology by the Cupertino giant.
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For example, while Apple allowed third-party companies to offer Apple Pay alternatives in the UK in 2024, one condition was that these companies had to use Apple’s Secure Element, which encrypts important payment card information during transactions.
In the EU, however, EU-wide rules mean that Apple must allow companies to use Host Card Emulation (HCE) for free instead of Secure Element, if they wish. The CMA wants that type of technology to be available in the UK and says it does not believe doing so would raise any “inherent security concerns”.
Commenting on the CMA’s move, Mattias Eld, CEO and co-founder of contactless firm Fidesmo, said: “Buying an iPhone shouldn’t mean handing Apple the keys to your wallet. Consumers should choose correctly how they pay, and banks should choose who to work with. But for more than a decade, Apple has honed its dominance over tap payment, by carefully and deliberately stifling its competitors. This has allowed Apple to charge banks inflated transaction fees, with the threat of exclusion. from such a vast market leaves them no choice but to pay.”
Apple retreats
The CMA says that while it is not seeking to dictate the prices or terms Apple must set, it wants to propose “principles for how this should be determined, with the expectation that the charges will be substantially lower than Apple’s current rates while still fairly rewarding Apple for providing access.”
However, Apple has rejected the CMA’s proposals, telling Reuters that “We do not believe the CMA should require Apple to adopt an approach with fewer privacy and security protections. We will continue to engage constructively to reach an outcome that is in the best interests of our users.”
Why is Apple restricting access to contactless payment technology? One answer might simply lie in the almighty dollar: As with the App Store, Apple charges third-party companies for access and probably doesn’t want to give up that revenue stream.
However, I’m not entirely convinced that’s the main reason; After all, Apple is one of the richest companies on the planet and makes huge profit margins on every product it sells. Is nickel and diming really such a central strategy when it comes to iPhone revenue? only increased 21% to $54.25 billion in Q3 2026?
Analysis: Apple fears it can pay the price
For me, a stronger argument centers on something else: control. This has been an obsession for the company since the days of Steve Jobs, and Apple is acutely and painfully sensitive to how its products are perceived.
If Apple loosened its grip on something as vital to the user experience as payments and financial services and a third-party contactless provider was then hacked or ripped off customers, Apple fears that would reflect poorly on itself as a company. For Apple perfectionists, anything that reduces the user experience due to Apple’s actions is absolutely impossible. By accepting payments entirely under its own aegis, Apple assures itself that nothing will go wrong.
There is a certain degree of logic in that. Apple has proven its security credentials and works harder than many companies to keep its systems incredibly secure. Going to a third party means trusting someone whose track record might not be as strong. But that certainly doesn’t mean that only Apple can safeguard your payment information, or even that only Apple should be allowed to even try.
If the CMA gets its way, Apple could be forced to change its ways. The company has already been forced to open its contactless walled garden in the EU, and the UK could soon follow. As a result, the way you pay using your phone can look very different.
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