UK Targets Apple Pay Dominance With New iPhone Contactless Payment Rules

 

UK Targets Apple Pay Dominance With New iPhone Contactless Payment Rules

Britain's competition regulator has proposed new measures designed to make it easier for rival payment services to compete with Apple Pay on iPhones.

The Competition and Markets Authority (CMA) announced the proposals on October 20, 2026, calling for lower access fees and fewer technical barriers affecting contactless payment applications.

The changes could give financial technology companies more opportunities to offer their own tap-to-pay services on Apple devices.

However, the proposals are still under consultation. No final decision has been made, and the announcement does not mean that Apple Pay is being banned.

What Has the UK Competition Regulator Announced?

The CMA wants to improve competition in the market for contactless payments on Apple devices.

Its proposals focus on the conditions under which other companies can access the technology used for tap-to-pay transactions.

According to Reuters, the regulator is seeking substantially lower access fees and easier technical access.

These measures are intended to help competing digital wallet providers develop services that work on iPhones.

The CMA believes existing restrictions may make it harder for smaller companies to compete with Apple's own payment system.

Apple disputes the suggestion that its current arrangements prevent secure competition.

Why Is Apple Pay Under Scrutiny?

Apple Pay is one of the most widely recognised mobile payment services.

It allows customers to make payments using compatible Apple devices.

Customers can tap their phones or watches at supported payment terminals rather than using a physical payment card.

The service is integrated with Apple's digital wallet technology.

Because Apple controls the iPhone's hardware and operating system, other payment providers depend on the technical access the company makes available.

The CMA is examining whether the terms of that access create unnecessary barriers to competition.

Contactless Payments Are Growing Rapidly in Britain

Digital and contactless payments have become a major part of everyday spending in the UK.

According to figures cited by the CMA, contactless payments now account for approximately 39% of all payments in Britain.

A decade earlier, the figure was just 3%.

The increase demonstrates how quickly payment habits have changed.

Consumers increasingly use cards, smartphones and wearable devices for everyday transactions.

As these payment methods become more important, regulators are paying closer attention to the companies controlling the underlying technology.

More Than 60% of UK Adults Use Digital Wallets

The CMA also reported that more than 60% of adults in Britain use a digital wallet.

Apple Wallet is the most popular digital wallet in the country, according to the regulator.

Digital wallets can store payment credentials and other supported digital items.

They offer a convenient alternative to carrying physical cards for some transactions.

However, widespread adoption also means that the rules governing wallet access can have a significant impact on competing businesses.

The CMA wants to ensure that payment providers have a fair opportunity to innovate.

What Is NFC Technology?

Near Field Communication, commonly called NFC, is a wireless technology that allows compatible devices to communicate over very short distances.

It is widely used for contactless payments.

When a customer taps a compatible smartphone near a payment terminal, NFC helps establish the connection needed for the transaction.

The payment process also involves security and authentication systems.

NFC technology is not exclusive to Apple.

However, access to specific NFC capabilities on iPhones is controlled through Apple's software and hardware systems.

The CMA's proposals focus on making that access easier for competing payment providers.

What Is Host Card Emulation?

Host Card Emulation, or HCE, is a technology that allows software applications to support certain contactless payment functions.

It can enable a third-party payment application to process transactions without relying exclusively on a device manufacturer's own wallet service.

The European Union has already required Apple to provide access to HCE for eligible developers under its regulatory commitments.

The UK's CMA now wants to make HCE available alongside Apple's existing secure element technology.

This could give developers additional options for designing payment services.

However, the exact technical and commercial requirements will depend on the final UK measures.

How Apple's Secure Element Works

Apple uses secure element technology to help protect sensitive information.

A secure element is a specialised component designed to store and process certain security-related data.

It can help protect payment credentials and cryptographic information.

Apple argues that its existing approach supports secure contactless services.

The company says developers can already offer various NFC-based experiences using the technology it provides.

These include certain payment, transport and ticketing services.

Apple is concerned that additional access requirements could weaken privacy and security protections.

What Does the CMA Want Apple to Change?

The regulator has identified two broad areas for improvement.

First, it wants lower fees for companies seeking access to Apple's contactless payment technology.

Second, it wants fewer technical restrictions that could prevent rival services from operating effectively.

The CMA believes these changes could help competing providers enter the market.

It also wants developers to have access to HCE technology alongside existing secure element options.

However, the final form of any requirements remains subject to consultation.

What Did CMA Chief Executive Sarah Cardell Say?

CMA Chief Executive Sarah Cardell said the regulator had heard concerns about high fees, strict terms and technical restrictions.

According to the CMA, these conditions can make it difficult for competing payment providers to innovate.

Cardell argued that greater access could encourage competition and strengthen the UK's financial technology industry.

The regulator also believes increased competition could provide consumers with more choice.

However, the extent of any eventual consumer benefit will depend on how businesses respond to the final rules.

Revolut Supports the Proposed Changes

Digital banking company Revolut welcomed the CMA's announcement.

Revolut believes access to NFC technology through HCE is important for creating a more competitive market.

The company's chief commercial officer, David Tirado, said the proposals could create opportunities for British fintech companies to compete more fairly with major technology platforms.

The response illustrates why payment providers are interested in access to smartphone payment technology.

Greater access could allow them to offer additional features directly through their own applications.

However, the announcement does not establish that Revolut has already launched a new UK iPhone contactless payment service under these proposed rules.

What Has Apple Said?

Apple defended its existing approach to contactless technology.

The company said developers can already provide contactless experiences using its NFC technology and secure element.

Apple argues that its systems help protect sensitive customer information.

It also expressed concern that the CMA's preferred approach could reduce privacy and security protections.

The company said it would continue engaging with the regulator.

This means the debate is not simply about whether contactless payments should be available.

It also concerns how competition, technical access and security requirements should be balanced.

How the European Union Changed Apple's Payment Rules

The European Union introduced stricter requirements concerning Apple's contactless payment technology in 2024.

Those commitments required Apple to provide eligible third-party wallet developers with free access to certain NFC capabilities through HCE.

The arrangements allowed competing applications to offer contactless payment services without requiring customers to use Apple Pay.

According to the CMA, companies including PayPal, Klarna, Curve and BBVA have subsequently introduced alternative payment applications in the European market.

The UK is now considering its own approach.

However, the British proposals are not identical to the EU arrangements.

Why the UK Proposals Are Different From EU Rules

The CMA's proposals are less demanding in some respects than the European Union's requirements.

The EU arrangements included free access for eligible third-party developers.

The British regulator is instead proposing substantially lower access fees.

The UK proposals would also allow developers to use HCE alongside Apple's secure element technology.

This approach seeks to encourage competition while considering different technical arrangements.

The final outcome will depend on the consultation process and the CMA's subsequent decision.

Could PayPal and Other Wallets Compete With Apple Pay?

Greater technical access could make it easier for payment companies to offer their own contactless services on iPhones.

This could potentially create more options for consumers.

Payment providers might develop features involving banking, loyalty programmes or other supported services.

However, the CMA announcement does not guarantee that every digital wallet provider will launch a competing payment service in Britain.

Companies will need to consider technical requirements, commercial arrangements and customer demand.

Any new services will also need to comply with applicable financial and security requirements.

What Does This Mean for iPhone Users in the UK?

For consumers, the most important potential benefit is greater choice.

If the proposals become final requirements, iPhone users may eventually have access to additional contactless payment applications.

Some customers may prefer to use payment services offered directly by their bank or another financial provider.

Others may continue using Apple Pay.

The proposals do not require customers to stop using Apple Pay.

They are intended to make it easier for competing services to operate alongside it.

Will Apple Pay Become Cheaper?

The CMA is proposing lower access fees for payment providers.

However, lower fees charged to businesses do not automatically mean lower prices for consumers.

The actual impact will depend on how payment providers use any savings.

Some may invest in additional features or customer services.

Others may adjust their commercial arrangements.

The announcement does not establish a specific reduction in transaction fees or other charges paid by consumers.

Could Contactless Payments Become More Secure?

Security is a central issue in the debate.

Apple argues that its secure element approach provides important protections.

The CMA is examining whether greater access can be provided while maintaining appropriate safeguards.

Different technical methods may involve different security considerations.

It would be premature to claim that the proposed changes will automatically improve or weaken security.

The final requirements and their implementation will be important in assessing the impact.

Consumers should continue following standard payment security practices regardless of which wallet they use.

Why the UK Is Regulating Major Technology Platforms

Britain has introduced a competition framework allowing regulators to impose targeted requirements on certain powerful digital platforms.

The CMA designated Apple and Google as having strategic market status in smartphones in 2025.

This designation provides a basis for considering specific competition measures.

The contactless payment proposals form part of that broader regulatory approach.

However, strategic market status does not automatically mean that a company has committed an illegal act.

The framework allows the regulator to examine market conditions and consider proportionate interventions.

How Could This Affect UK Fintech Companies?

Britain has a substantial financial technology sector.

Fintech businesses develop digital banking, payment and financial management services.

Access to smartphone payment technology can be important for companies seeking to compete with established providers.

If technical and commercial barriers are reduced, some businesses may find it easier to develop new products.

However, greater access does not guarantee commercial success.

Fintech companies must still attract customers, maintain security and comply with financial regulations.

The proposals may create opportunities, but their practical effect remains uncertain.

What Does This Mean for American Technology Companies?

Apple is headquartered in the United States, but it operates internationally.

Regulatory changes in major markets can affect how global technology companies design and distribute their services.

The UK proposals are therefore relevant to American technology businesses operating in Britain.

Other companies may also monitor the outcome as regulators examine competition in digital ecosystems.

However, the CMA's consultation does not establish new contactless payment rules for consumers in the United States.

Any American regulatory changes would require separate action by the relevant authorities.

Will These Rules Affect Android Phones?

The latest CMA proposals specifically address Apple's contactless payment technology.

Android devices have different software and hardware arrangements.

Google was also designated as having strategic market status in smartphones under the UK's competition framework.

However, the October 20 announcement should not be interpreted as a new universal rule applying identically to all Android devices.

The details concern access to Apple's iPhone payment technology.

What Happens to Apple Pay After the Proposals?

Apple Pay will continue operating while the regulatory process proceeds.

The CMA has not announced a ban on the service.

Instead, the regulator wants rival providers to have improved access to the technology needed to compete.

If final requirements are introduced, Apple may need to adjust certain commercial or technical arrangements.

However, the specific obligations have not yet been finalised.

Consumers should not assume that their existing payment services will immediately change.

When Will the CMA Make Its Final Decision?

The CMA is consulting on its proposals until November 17, 2026.

Interested parties can provide feedback during the consultation period.

The regulator will then consider the responses before making a final decision.

The Reuters report does not establish that all proposed measures will be adopted unchanged.

Apple and other businesses may continue presenting their views.

Further announcements will clarify the next steps.

Why This News Matters in October 2026

Contactless payments are now a major part of everyday financial activity in Britain.

As more consumers use digital wallets, the ability of competing companies to access smartphone payment technology becomes increasingly important.

The CMA believes lower fees and fewer restrictions could encourage innovation.

Apple argues that privacy and security must remain central to the system.

The final decision could influence the future of digital wallet competition in the UK.

The Bigger Picture

Smartphones have become important tools for banking, shopping and managing everyday payments.

Technology companies control many of the systems that make these services possible.

Regulators are examining whether access to those systems is sufficiently competitive.

The UK's latest proposals concerning Apple Pay illustrate the growing intersection of financial technology and competition policy.

For consumers, the potential result is greater choice.

For developers, the proposals could create additional opportunities.

For Apple, the process raises questions about how its payment technology should be made available to competitors.

Bottom Line: On October 20, 2026, Britain's Competition and Markets Authority proposed lower access fees and fewer technical restrictions for competing contactless payment services on iPhones. The measures could help rival digital wallets compete with Apple Pay. Revolut welcomed the proposals, while Apple raised privacy and security concerns. The consultation remains open until November 17, and no final requirements have been announced.