UK smartphone users could gain access to new payment, ticketing and travel applications if Apple broadens its contactless payment technology to rival firms and substantially reduces the fees it charges for access, according to the country's competition watchdog.
The Competition and Markets Authority (CMA) has published formal proposals aimed at opening Apple's payment infrastructure to greater competition. According to BBC News, the regulator believes Apple's current fee structure and technical restrictions are preventing financial technology companies and other innovators from developing competing services and scaling their operations.
Apple responded by defending its existing arrangements, arguing that expanded access could compromise security and that its current model already permits developers to offer contactless transactions securely within their applications. The company stated that
the current arrangements had permitted developers in the UK and around the world to securely offer contactless transactions directly within their apps, for everything from in-store payments and transit passes to car keys and event tickets, and that
this solution enables developers and banks to create innovative products and services for their customers and facilitates competition between wallets, while ensuring users' sensitive data remains protected by the highest security standards.
Contactless payments now account for nearly two in five transactions across the UK, with nearly 60% of people using digital wallets. Apple's wallet remains the most widely adopted in the country, giving the company significant market influence over how consumers make payments.
What would the CMA's proposals change?
The CMA's formal proposals, published on 20 October 2026, would require Apple to grant third-party developers access to both major contactless technology standards used globally. Currently, Apple only permits use of one standard in the UK and restricts access to Host Card Emulation (HCE), a widely adopted alternative contactless technology that the company does not currently allow on its devices.
The regulator's evidence review found that neither contactless standard inherently raises security concerns, and that access to both could help UK firms offer services already available in the EU. The CMA is not proposing to set specific prices Apple could charge for access, but rather to establish principles for determining fair terms. The regulator expects that opening the market would naturally drive fees substantially lower while still providing Apple with reasonable compensation for use of its technology.
How could this benefit UK consumers and businesses?
Opening Apple's contactless technology could enable the creation of a diverse range of new financial and lifestyle products, including account-to-account payment systems, digital identity verification, travel passes and digital keys for vehicles and properties. The UK is already one of the world's leading fintech hubs, generating more than £214 billion in annual turnover and supporting over 360,000 jobs, yet Apple's restrictions are limiting further growth and innovation in the sector.
The CMA pointed to developments in the European Union as evidence of the potential. In the six months following the EU's decision to force Apple to widen access to its technology, multiple competing payment applications launched, including Vipps, PayPal, Klarna, Curve and BBVA. By contrast, the CMA noted that not a single UK firm has launched a wallet-type product to compete with Apple's offering, suggesting that Apple's fees and technical barriers are preventing market entry in Britain.
CMA Chief Executive Sarah Cardell stated that
by removing barriers to entry, we can help create the conditions for brilliant British businesses with great ideas to develop new products and services. She explained that the regulator had received reports from firms indicating that
high fees, strict terms, and technical restrictions relating to Apple's contactless technology made it too difficult for challengers to innovate and compete.
Why is Apple resisting these changes?
Apple has consistently argued that widening access to its contactless payment system could undermine the security protections that safeguard user financial data. The company maintains that its current arrangements do not prevent innovation and that developers have already found ways to offer competitive services within the existing framework.
The company further stated that
we do not believe the CMA should require Apple to adopt an approach with lower privacy and security protections. We will continue to engage constructively to reach an outcome that is in the best interest of our users. Apple also disputed the CMA's assertion that EU regulatory changes directly caused new payment apps to launch, suggesting these applications could have entered the market earlier if they had chosen to do so.
This dispute reflects a broader pattern of regulatory tension between Apple and UK authorities. The company has previously warned UK regulators against following the European Union's approach, which has forced Apple to open various technologies to competitors. However, the CMA has emphasised that its focus differs from the EU's broader strategy, targeting specific aspects of Apple's ecosystem such as digital wallets and smartwatches rather than demanding wholesale interoperability across all services.
What is the regulatory context?
The CMA's proposals follow its formal designation of Apple as holding Strategic Market Status for its mobile platform under the Digital Markets, Competition and Consumers Act 2024. This classification gives the regulator enhanced powers to intervene in Apple's business practices where they may harm competition.
Apple launched its NFC and Secure Element access platform in the UK in October 2024, intended to provide developers with an alternative route to offer contactless payments. However, the CMA found that this initiative has failed to generate meaningful competition, with no UK product launches using the platform. The regulator attributed this lack of uptake to the fees Apple charges and technical differences that create barriers for developers seeking to build competing services.
Meanwhile, broader trends in UK payment behaviour underscore the importance of this issue. Two-thirds of UK adults now use mobile payment services, and cash use continues to decline, though at a slower pace than previously forecast. Cash is projected to represent just 4% of all payments by 2035, making digital payment infrastructure increasingly central to how consumers and businesses transact.
What happens next?
The CMA's consultation on its proposals remains open until 17 November 2026. Following the close of the consultation period, the regulator will review all responses received from Apple, consumer groups, competing payment firms and other stakeholders before reaching a final decision on whether to proceed with the proposed measures and in what form.
