Apple faces UK tap-to-pay regulatory challenge

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Apple UK tap-to-pay challenge

Highlights

UK Competition and Markets Authority will propose rules next week requiring Apple to allow alternative tap-to-pay options on iPhone, citing unfair market power.
Apple may legally challenge the CMA's demands to open iPhone NFC access, risking fines up to 10 per cent of global turnover under UK's digital competition rules.
Opening NFC to competitors like PayPal, Revolut, and Monzo could boost fintechs, but concerns remain over Apple's fees and providers' reluctance to build separate UK and EU products.

Planned CMA rules and likely legal response

As first reported by the Financial Times, the Competition and Markets Authority is set to publish consultation proposals next week arguing that Apple holds unfair power in the UK tap-to-pay market. The regulator is expected to recommend changes to the iPhone operating system so users can choose alternatives to Apple Pay when making contactless payments.

The measures are part of the CMA's conduct requirements for Apple after the company received strategic market status for its mobile platform under the UK's digital competition rules last year. The designation lasts five years and can expose companies to fines of up to 10 per cent of global turnover if they breach the rules.

Apple is likely to challenge any decision in court, according to people briefed on the matter. The company does not respond to requests for comment, while the CMA declines to comment.

Implications for UK fintechs and payment competition

Opening access to the iPhone's Near Field Communication chip would mark a significant gain for fintech groups including PayPal, Revolut and Monzo, as well as traditional banks that have long argued Apple's rules shut them out of the UK contactless payments function. Banks and fintechs also object to the 0.15 per cent share Apple takes from credit card charges made through Apple Pay.

Apple says limiting NFC access to its own wallet service helps protect security and combat fraud. But the CMA is expected to push the UK towards a framework closer to the EU's Digital Markets Act, under which Apple is forced to open NFC access so other providers can build their own wallets and be selected as the default payment option.

In 2024, Apple introduces a system in several countries, including the UK, that allows payments companies to access NFC technology if they sign commercial agreements, follow Apple's security and privacy rules and pay associated fees. Competition authorities remain concerned that this model is anti-competitive, and some industry figures say providers are reluctant to build separate products for the EU and UK, risking delays to new services in Britain's fintech market.

The move also comes as the CMA seeks to recast its approach after government pressure last year to put greater emphasis on UK economic growth. Since then, the watchdog is trying to speed up investigations, give businesses more certainty and take a less interventionist line on mergers and acquisitions.

In our earlier article on Philippine e-commerce payment trends, we noted that cash-on-delivery still makes up a sizable share of online purchases even as QR and bank-transfer usage accelerates. The report highlighted that many shoppers abandon checkout when their preferred payment method is missing, increasing pressure on merchants to offer broader payment choice while keeping fraud controls strong.

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