The UK's Competition and Markets Authority (CMA) has introduced new guidelines to foster competition in contactless payments on iPhones. The regulator aims to reduce fees charged by Apple and simplify access for banks, fintechs, and other digital wallets to the device's NFC chip.
According to Reuters, the proposals include implementing lower access costs and allowing the use of alternative methods to the contactless payment system currently provided by Apple. This plan will be open for public consultation until November 17th.
Similar to what occurred in the European Union, which regulated digital wallets on Apple devices in 2024, one of the mechanisms considered is Host Card Emulation (HCE). This technology allows applications to make payments without depending on the physical component known as the Secure Element. Currently, Apple already permits third-party integrations with NFC on the iPhone through APIs.
Although following a similar path, the UK's proposal is less stringent towards Apple compared to the standards set in the European bloc. In Europe, the company committed to ensuring free third-party access to the iPhone's NFC for contactless payments. In contrast, the British CMA is not proposing this gratuity, focusing instead on reducing charges and expanding access routes to NFC.
The authority gained the power to intervene in this type of practice after classifying Apple and Google as companies holding strategic market status in the mobile platforms segment. Data presented by the CMA indicates that contactless transactions currently account for 39% of all payments made in the UK, a significant increase from the 3% recorded ten years ago. Furthermore, the CMA points out that over 60% of adults in the country use some form of digital wallet, with Apple Wallet being the most used by Britons.
Sarah Cardell, CEO of the CMA, stated that 'we have heard that Apple's high fees, inflexible terms, and technological restrictions hinder innovation and competition from rivals.' NFC is part of a set of services and technologies present in Apple devices that are under regulatory scrutiny, particularly in Europe.
Recently, the company was forced to yield exclusivity over proprietary tools in certain situations. One example was the agreement reached with the Administrative Council for Economic Defense (Cade) to implement modifications, including opening the Apple Store and external payments, in Brazil. Although this measure received support from financial sector entities in the region, it generated dissatisfaction at Apple.
The company argues that developers already have ways to offer contactless payments on the iPhone using both NFC and the Secure Element, and that expanding the use of other technologies could diminish the safeguards of the current system. An Apple spokesperson stated: 'We do not believe that the CMA should require Apple to adopt an approach with lower privacy and security protections.'
The CMA will analyze all contributions received during the public consultation period before determining whether the suggestions will be turned into official requirements.