UK pushes Apple to open contactless payments to rival apps
The UK competition watchdog has moved to widen access to Apple’s contactless payment technology, arguing that current rules and fees are holding back financial technology firms and other developers from building new services. The proposal would force Apple to open parts of its system to rivals using Host Card Emulation, a widely used alternative contactless standard that the company does not currently allow in the UK.
The stakes are broader than tap-to-pay alone. If the plan goes ahead, it could affect digital wallets, travel passes, digital IDs and digital keys — the kind of everyday functions that increasingly sit inside the same phone used for banking, transport and access control.
Apple says the current setup already supports innovation while preserving security. The Competition and Markets Authority disagrees, and says the existing mix of fees, strict terms and technical restrictions is creating a barrier to entry that discourages competition before it starts.
Fees, technical restrictions and a closed gate
Nearly 2 in 5 payments are now contactless in the UK, and nearly 60% of people use digital wallets. Apple’s wallet is the most popular in the country, which gives the company unusual leverage over how consumers pay and how third-party developers reach them. In a market this concentrated, access rules matter because they determine whether a new product can even reach the starting line.
Sarah Cardell, the CMA’s chief executive, said the watchdog had heard that high fees, strict terms and technical limits tied to Apple’s contactless system made it too difficult for challengers to innovate and compete. The regulator is not proposing to set the exact price Apple must charge for use of its technology, but it is consulting on measures it believes would drive those fees lower in practice.
The commercial logic is straightforward. A platform that controls the secure element of a payment system can shape who participates, what they pay, and how much freedom they have to build around the device. For smaller fintech firms, those conditions can decide whether a wallet, transit pass or digital key is viable at all.
Apple frames the dispute as a security question
Apple’s response centers on privacy and security. The company says widening access could undermine protections for users, and argues that its current arrangements do not block innovation. It has told the BBC that developers and banks in the UK and elsewhere are already able to offer contactless transactions within their apps for in-store payments, transit passes, car keys and event tickets.
The company’s position is that its system enables competition among wallets while protecting sensitive data to high security standards. It also argues that the CMA should not force a model with weaker privacy or security safeguards.
One sentence captures the whole fault line: the regulator sees a gatekeeper, while Apple sees a security architecture.
That clash is familiar in digital markets where the same infrastructure serves both convenience and control. Contactless payment systems are not just software features; they are trust systems. A regulator that seeks broader interoperability must weigh whether opening the door will spur competition without diluting the safeguards that make consumers willing to use the system in the first place.
The EU experience is now part of the argument
Apple warned UK regulators last year against following the European Union’s approach, which compelled the company to open a range of technologies to rivals. The CMA says its proposal is narrower than the EU model because it focuses on specific aspects of Apple’s technology, including digital wallets and watches, rather than a sweeping change across the entire device ecosystem.
The European experience is being used as evidence on both sides. The CMA says that once access expanded in the EU, rival apps began to appear. In the six months after the changes, Vipps launched, followed by PayPal, Klarna, Curve and BBVA. Apple counters that these products could have launched before the rule change and that the timing does not prove causation.
Even so, the UK regulator points to a striking asymmetry: no firm has launched a wallet-type product in the UK that competes with Apple’s own offering. In competition cases, that kind of absence is often as revealing as a launch list. If rivals are technically or commercially boxed out, the market can look active from the outside while remaining effectively sealed.
Fintech, transport and digital identity sit inside the same device
The CMA has tied the issue to the UK’s broader fintech economy, which it says generates more than £214 billion in turnover and supports more than 360,000 jobs. Its argument is not limited to payment convenience. The same access rules that determine who can build a wallet can also shape whether the next generation of account-to-account payments, travel passes, digital IDs and digital keys ever reaches consumers.
That is where interoperability becomes a policy issue, not just a technical one. When one company controls a core contactless interface, every adjacent service has to negotiate with that control point. The downstream effect is slower product development, fewer rivals, and a narrower set of consumer choices.
For Apple, the risk is that mandated access could weaken the security model that has helped its wallet dominate. For the CMA, the risk of doing nothing is stagnation — a market in which the largest platform can set the rules and everyone else has to adapt to them.
The consultation now turns on whether the UK wants to preserve a tightly controlled closed system or force a more open one for contactless payments and related device functions. The regulator’s own framing leaves little ambiguity about what it expects to happen next: more competition, lower fees and a broader field of developers able to build on Apple’s hardware. Apple’s reply is equally direct, insisting that the current arrangement already enables innovation without sacrificing user protection.
What remains unresolved is how much security consumers are willing to trade, if any, for a market with more than one serious wallet player on the phone screen.