UK Watchdog to Force Apple to Open iPhone NFC for Rival Wallets

The UK's Competition and Markets Authority is preparing to publish consultation proposals next week that challenge Apple's grip on the country's contactless payments infrastructure, according to a Financial Times report.

The regulator intends to argue that Apple maintains unfair dominance over the domestic tap-to-pay market by restricting how iPhones handle contactless transactions.

Sources familiar with the plans told the publication that the CMA will propose forcing changes to iOS, allowing UK consumers to select rival payment services as their default option instead of being locked into Apple Pay.

The proposed intervention stems from the CMA's decision last year to assign Apple strategic market status for its mobile platform under new digital competition laws.

Companies receiving this designation — which the authority grants to firms with substantial influence in digital markets — face obligations that remain in force for five years.

Non-compliance carries penalties reaching up to 10% of global annual turnover, giving the regulator significant enforcement leverage.

The CMA held an initial consultation during the summer after financial institutions raised concerns about Apple's market position and business practices.

Banks and fintech companies have specifically objected to the 0.15% fee Apple charges on credit card transactions processed through Apple Pay.

In the UK and most other markets, Apple blocks third-party applications from accessing the iPhone's Near Field Communication chip, which enables devices to communicate with retail and transit payment terminals.

Apple has consistently argued that limiting NFC access protects user privacy and prevents fraud.

Two people briefed on the matter told the FT that Apple is likely to mount a legal appeal against the CMA's forthcoming requirements.

The regulator is expected to propose a framework similar to the EU Digital Markets Act, which forced Apple to open NFC functionality to external wallet providers across the bloc.

While Apple rolled out an NFC access framework in several regions during 2024, companies must sign commercial agreements, meet specific security standards, and pay associated fees to participate.

One source noted that divergence from European regulations has delayed new payment services from launching in the UK market.

The delay creates obstacles for the domestic fintech industry and limits opportunities for technical innovation, according to those familiar with the situation.