Apple Pay faces UK crackdown that could change iPhone tap-to-pay

The UK government wants more Apple Pay alternatives for consumers It’s proposing opening the technology up to other companies It also wants Apple to charge lower fees for access If you pay for an item using the contactless tech on any of the best iPhones , you’re locked into Apple’s way of doing things.

But the UK government’s competition regulator — the Competition and Markets Authority (CMA) — is proposing new rules that could blast open the way you pay using your iPhone.

According to a press release on the UK government website, the CMA believes that “Apple’s fees and rules are blocking UK fintechs and other businesses from innovating and growing” and that its proposed changes are “expected to result in substantially lower access fees, helping make it commercially viable for more businesses to innovate and compete.” The CMA pointed out that no rivals to Apple Pay exist in the UK, as opposed to in the EU, where several alternatives can be used.

The CMA believes this is due to both high fees charged by Apple and restrictions placed on certain technology by the Cupertino giant.

For instance, while Apple allowed third-party companies to offer Apple Pay alternatives in the UK back in 2024, one condition was that these firms had to use Apple’s Secure Element, which encrypts important payment card information during transactions.

In the EU, however, European Union-wide rules mean that Apple must let companies use host card emulation (HCE) for free instead of the Secure Element, if they wish.

The CMA wants that kind of technology to be available in the UK and says it does not believe that doing so would raise any “inherent security concerns.” Commenting on the CMA’s move, Mattias Eld, CEO & Co-founder at contactless firm Fidesmo, said: “Buying an iPhone should not mean handing Apple the keys to your wallet.

Consumers should rightly choose how they pay, and banks should choose who they work with.

But for over a decade Apple has honed its domination over tap-to-pay, through the careful and deliberate stifling of its competitors.

This has allowed Apple to charge banks inflated transaction fees, with the threat of exclusion from such a vast market leaving them little choice but to pay.” Apple pushes back (Image credit: Apple) The CMA says that while it isn’t seeking to dictate the prices or terms that Apple must set, it wants to propose “principles for how this should be determined, with the expectation that charges would be substantially lower than Apple’s current fees while still fairly rewarding Apple for providing access.” However, Apple has pushed back against the CMA’s proposals, telling Reuters that “We do not believe the CMA should require ​Apple to adopt an approach with lower privacy and security protections.