How UK plans to break Apple's dominance in contactless payments
What's the story
UK's competition regulator, the Competition and Markets Authority (CMA), has proposed measures to reduce Apple's dominance in the contactless payments space. The CMA is pushing for lower fees and the removal of technical barriers, which would allow rival services to compete with Apple Pay. The proposals are aimed at making access to Apple's contactless technology easier and reducing access fees significantly.
Market impact
CMA's proposals less stringent than EU's 2024 regulations
The CMA's proposals are less stringent than those enforced by the European Union in 2024, which included giving third-party wallet developers free access.
Since then, several companies have launched alternative payment apps.
CMA Chief Executive Sarah Cardell said these proposals would encourage more innovation and choice while boosting Britain's fintech sector.
Regulatory concerns
Cardell highlights barriers to entry for challengers
Cardell emphasized that high fees, strict terms, and technical restrictions related to Apple's contactless technology make it 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."
Payment trends
Contactless payments surged in popularity over the past decade
The CMA noted that contactless payments have surged in popularity, accounting for 39% of all transactions today, compared to just 3% a decade ago.
Over 60% of adults now use a digital wallet, with Apple Wallet being the most popular in Britain.
The CMA is currently consulting on these proposals until November 17 before making a final decision.
Tech response
Apple responds to CMA proposals
In response to the CMA's proposals, Apple said it had already made contactless payments possible for developers through NFC and its secure element.
An Apple spokesperson said this enabled developers to create products and services while keeping users' sensitive data protected by high security standards.
The company added, "We do not believe the CMA should require Apple to adopt an approach with lower privacy and security protections."