Britain seeks to break Apple's grip on contactless payments

LONDON, Oct 20 : Britain's competition regulator said on Tuesday it was seeking to loosen Apple's grip on contactless payments by proposing that the company lower fees and remove technical barriers, helping rival services compete with Apple Pay.

The Competition and Markets Authority said its proposals would result in "substantially lower access fees" and easier access to Apple's contactless technology, opening the market to competition from digital banks and other providers.

The proposed measures are less onerous than those imposed by the European Union in 2024, which included giving third-party wallet developers free access. Since then, companies including Vipps, PayPal, Klarna, Curve and BBVA have launched alternative payment apps, the CMA said.

CMA Chief Executive Sarah Cardell said the proposals would open the door to more innovation and more choice, as well as boosting Britain's important fintech sector.

"We have heard that high fees, strict terms, and technical restrictions relating to Apple's contactless technology make it too difficult for challengers to innovate and compete," she said.  

"By removing barriers to entry, we can help create the conditions for brilliant British businesses with great ideas to develop new products and services here - from payment apps and digital IDs to travel passes and digital keys."

The CMA is consulting on the proposals until November 17, before making a final decision.

Contactless payments have grown rapidly in popularity, accounting for 39 per cent of all payments, compared with just 3 per cent a decade ago, the CMA said. More than 60 per cent of adults use a digital wallet, with Apple Wallet the most popular in Britain, it added.

Apple said it had already made it possible for developers to offer contactless payments in their apps through NFC, which allows an iPhone to talk to a payments terminal or reader, and through its secure element, which stores sensitive material such as card credentials and cryptographic keys.

The company said this allowed developers to create products and services, including in-store payments, transit passes and event tickets, while ensuring users' sensitive data remained protected by the highest security standards.

"We do not believe the CMA should require Apple to adopt an approach with lower privacy and security protections," an Apple spokesperson said.

"We will continue to engage constructively to reach an outcome that is in the best interest of our users."