UK regulator proposes rules to open iPhone payment tech to rivals
The CMA aims to lower Apple’s fees and allow host card emulation, seeking to end the lack of Apple Pay competitors in Britain.
Key points
- The Competition and Markets Authority proposes new rules to lower Apple’s access fees and open payment technology.
- The regulator wants to allow host card emulation, a standard available for free in the EU, to foster UK competition.
- Industry leaders argue current restrictions have stifled innovation and kept transaction costs high for banks.
The Competition and Markets Authority (CMA) has proposed new regulations that could fundamentally change how consumers use Apple Pay on iPhones in the United Kingdom. According to a press release on the UK government website, the regulator aims to break down barriers that it believes are preventing fintech companies and other businesses from innovating in the contactless payment space.
The CMA’s proposal focuses on two main changes: significantly lowering the fees Apple charges for access to its payment platform and mandating that Apple allow third-party providers to use host card emulation (HCE). The regulator states that these changes are expected to make it commercially viable for more businesses to compete, thereby increasing consumer choice. Currently, no direct rivals to Apple Pay operate in the UK, a situation the CMA contrasts with the European Union market, where several alternative payment services exist.
Regulatory Context and Technical Barriers
The CMA attributes the absence of competitors in the UK to a combination of high access fees and specific technical restrictions imposed by Apple. In 2024, Apple permitted third-party companies to offer alternatives to Apple Pay in the UK, but it required them to use Apple’s Secure Element for encrypting payment card data during transactions. The CMA argues that this requirement, coupled with high costs, has blocked growth and innovation among UK fintechs.
In the European Union, different rules apply. EU regulations mean that Apple must allow companies to use host card emulation (HCE) for free if they wish to do so, rather than forcing them to use the Secure Element. The CMA wants to replicate this technical availability in the UK. The regulator explicitly stated that it does not believe allowing HCE would raise any inherent security concerns, countering potential safety arguments against the shift.
Industry Reaction and Market Impact
Industry leaders have welcomed the regulatory move, citing the need for greater competition in the digital wallet sector. Mattias Eld, CEO and co-founder of contactless firm Fidesmo, commented that buying an iPhone should not equate to handing Apple control of a consumer’s wallet. He argued that consumers should have the right to choose their payment methods and that banks should be free to choose their partners.
Eld stated that Apple has spent over a decade dominating tap-to-pay by deliberately stifling competitors. He claimed this domination allows Apple to charge banks inflated transaction fees, leveraging the threat of exclusion from a vast market to force compliance. The CMA’s proposal seeks to address these market dynamics by ensuring that technology access is not a bottleneck for competition.
As Threat Times reported in October 2026, the iPhone Duo introduced a new form factor for the device, expanding the ecosystem where these payment technologies are used. The potential opening of the payment stack could impact how these newer devices interact with financial services in the UK market.
What should you do?
Consumers and businesses should monitor official announcements from the CMA regarding the timeline for implementing these proposed rules. Until final regulations are enacted, current payment structures and fee arrangements remain in place. Businesses relying on Apple Pay for transactions should prepare for potential changes in technology requirements, specifically regarding the use of host card emulation versus the Secure Element.
What to do and how to stay safe: Apple
- Monitor official CMA press releases for final regulatory decisions and implementation timelines.
- Review current payment processing contracts to understand potential impacts of lower access fees.
- Evaluate technical readiness for host card emulation if your business offers alternative payment solutions.
- Consult with legal and compliance teams to ensure adherence to evolving UK competition regulations.
Step-by-step guide: Mobile Device Security: How to Protect Data Beyond Passwords
General security guidance from the Threat Times newsroom. It is not confirmed advice from the organisations named in this story.
Frequently asked questions
Why does the CMA want to change Apple Pay rules?
The CMA believes Apple’s fees and rules are blocking UK fintechs from innovating and growing, and proposes changes to result in lower access fees and more competition.
What is the difference between the UK and EU rules for Apple Pay?
In the EU, Apple must let companies use host card emulation for free, while in the UK, third parties were required to use Apple’s Secure Element, which the CMA says has hindered competition.
Does the CMA think using host card emulation is unsafe?
No, the CMA states it does not believe that making host card emulation available in the UK would raise any inherent security concerns.
