The UK’s competition regulator has put forward a plan that could reshape how contactless payment apps work on iPhone. The proposals target the commercial and technical conditions facing companies that want to offer an alternative to Apple Pay, with the Competition and Markets Authority arguing that the current setup makes it too difficult and costly for credible rivals to enter the market.
This is not a proposal to remove contactless payments from iPhone or to stop Apple from operating its own wallet. The central question is narrower, but consequential: whether outside developers should have a more practical route to the near-field communication hardware used when an iPhone is held near a payment terminal.
The CMA is consulting on measures that would expand technical options for developers and substantially reduce access fees, while still allowing Apple to charge for access. Responses are open until November 17, 2026, after which the regulator will consider the evidence and make a final decision.
What the dispute is really about: NFC access
NFC, short for near-field communication, is the short-range wireless technology behind the tap-to-pay interaction familiar at shops, transport gates and other compatible terminals. In practical terms, it is what enables a phone to communicate with a payment reader when brought close to it.
Access to that capability is the essential ingredient for any company attempting to build an iPhone contactless-payment app. A wallet can have a polished interface, customer accounts and payment relationships, but without a workable way to conduct the tap at the terminal, it cannot function as a full contactless alternative.
Apple opened NFC access to third-party developers in the UK in 2024. However, the available route requires developers to enter an agreement with Apple, pay fees and use the iPhone’s Secure Element. The CMA’s view is that those terms remain a significant barrier to rivals. It says the combination of restrictions and charges has made launching competing contactless apps too difficult.
That distinction matters. “NFC access is available” and “rivals can realistically compete” are not necessarily the same claim. The regulator’s proposals are concerned with the second issue: whether the available conditions produce a usable competitive path for companies that might otherwise offer an alternative wallet-type service.
Secure Element and HCE, explained
The technical point at the heart of the consultation is the difference between the existing Secure Element-based route and an alternative known as host card emulation, or HCE.
The Secure Element is a chip designed to store sensitive information, including payment credentials. Under the existing UK arrangement described by the CMA, third-party developers must use that component when building a contactless payment service. Apple’s position is that the regulator should not require it to adopt an approach it believes has lower privacy and security protections.
“We do not believe the CMA should require Apple to adopt an approach with lower privacy and security protections. We will continue to engage constructively to reach an outcome that is in the best interest of our users.”
Host card emulation is another way a payment app can perform the relevant contactless-card function without relying on the Secure Element. The CMA wants Apple to support HCE in the UK as well. Its assessment of the evidence so far is that neither model is inherently insecure.
That phrasing is important. It does not mean every implementation is automatically equally safe, nor does it dismiss the need for privacy and security requirements. It means the regulator has not found evidence that the HCE model, simply by being HCE, is intrinsically insecure. The policy debate is therefore about how access can be opened while maintaining appropriate safeguards, not a choice between security and no security.
Why Europe is central to the CMA’s argument
The CMA points to developments in the European Union as a real-world reference point. Apple already provides HCE access there without charge under commitments agreed in 2024. Rival payment apps have subsequently launched in the EU.
In the UK, by contrast, the CMA says no competing wallet-type product has launched under Apple’s current terms. That comparison does not prove that a single rule change will produce the same outcome in every market. Companies still need a business case, a product and the necessary partnerships to bring a payment service to consumers. But it does give the regulator a concrete basis for asking whether the UK’s current conditions are less effective at enabling entry.
The proposed changes would not guarantee that a flood of payment apps arrives on UK iPhones. They would instead remove or reduce some of the constraints that the CMA believes prevent firms from trying. Whether companies ultimately launch would depend on their own commercial decisions, but the regulator’s objective is to make those decisions less dependent on Apple’s existing fee structure and mandatory technical route.
What could change for developers
For developers and payment-service companies, the most tangible potential changes are choice and cost. A provider would potentially have more than one technical method for enabling contactless transactions on iPhone, instead of being limited to a Secure Element-based route. The CMA also expects its proposed rules to substantially lower access fees.
Those are separate levers. A lower fee can make a product more commercially viable, while HCE support can alter the technical design choices available to the company. Either could matter to a business deciding whether to build for iPhone; together, they could reduce the threshold for a rival service to enter the UK.
The proposal does not suggest Apple would have to provide access for nothing. The regulator’s framework would still permit a charge. That is a meaningful detail because the consultation is not framed as a blanket demand for free use of Apple technology. Rather, it concerns what level of charge and what terms would avoid shutting out would-be competitors.
For readers following Apple’s wider platform strategy, the company’s continuing work across devices and services remains relevant context; Apple’s long-term modem efforts, for example, show how closely hardware control and future service capabilities can intersect. In this case, though, the immediate issue is not mobile-network connectivity. It is the ability of outside apps to use the iPhone’s existing close-range payment technology under terms the CMA considers competitive.
What it could mean for iPhone users
For iPhone owners, the short-term practical answer is simple: nothing has changed yet. These are consultation proposals, not final rules, and no alternative UK wallet-type product is being announced by the regulator.
If the CMA ultimately adopts measures that make entry more feasible and companies choose to act on them, users could eventually see more contactless-payment options. That possibility is the intended consumer-facing effect of increased competition: providers may seek to differentiate themselves through their own service designs. The evidence supplied here does not establish what particular apps would launch or what features they would offer, so those details remain speculative.
Security will also remain an unavoidable part of the decision. Payment credentials are highly sensitive, and Apple’s objection focuses on its belief that a required HCE approach would provide lower privacy and security protections. The CMA has reached a different preliminary view on inherent security, but its final decision will follow consultation responses. The outcome may therefore turn on the precise safeguards, obligations and access terms included in any final framework, rather than the broad labels alone.
A competition case with a technical edge
This is a competition-policy story, but it cannot be understood without the technical vocabulary. The Secure Element and HCE are not abstract engineering preferences; they define the routes through which a third party can deliver the moment of payment at a physical terminal. Fees are likewise not merely a commercial footnote if they are high enough to make a rival product uneconomic.
The CMA’s case is built around both factors. Its position is that Apple’s current fees and restrictions constrain rivals, that HCE should be supported alongside the Secure Element option, and that access costs should fall substantially. The EU example gives the regulator an observable contrast: HCE access is free there and rival payment apps have launched, whereas the UK has not seen a competing wallet-type product launch under its present terms.
Apple, meanwhile, says developers can already offer contactless services with its technology and warns against a mandated approach it considers weaker on privacy and security. Those claims frame the consultation’s key tension: opening a tightly controlled capability more fully to competitors while deciding what protections and compensation remain appropriate.
There is no final ruling yet, and the consultation period gives developers, Apple and other interested parties an opportunity to challenge, refine or support the proposed approach. Until the CMA reaches its decision, the most concrete takeaway is that the UK is considering a more open and less expensive framework for iPhone contactless-payment rivals—one modeled in part on a route already available in the EU.
