UK watchdog plans to open up iPhone payments
Key Points
- The Competition and Markets Authority has announced proposals to open up iPhone contactless payment functionality to third-party apps.
- Under the proposals, Apple would need to provide access to NFC payments and reduce its fees so that companies could compete with its products effectively.
- This would allow UK-based companies to compete with Apple Wallet, which currently has no real competitor in the UK market.
- In the EU, where similar regulation has been implemented, there are several other payment applications that compete with Apple Wallet for market share.
The United Kingdom’s Competition and Markets Authority (CMA) is consulting on proposals to require Apple to open up iPhone NFC payments to third-party developers.
The CMA said it has heard concerns from UK businesses that Apple’s current contactless payment restrictions for iPhones may not be commercially viable, and that fees and access terms may be onerous.
Businesses have complained that the closed Apple Wallet system for iPhone wallets make it difficult for other payment applications to compete effectively with Apple.
In Europe, the EU requires Apple to provide NFC access for iPhone payments to companies aiming to utilise the functionality. This has led to the launch of alternative payment apps that can compete with Apple Wallet, including Vipps, PayPal, Klarna, and Curve.
However, there is currently no wallet-type contactless payment product that competes with Apple Wallet in the United Kingdom.
The CMA said that it wants UK businesses to have the chance to compete with existing wallets and build technologies that leverage the functionality of one of the most popular smartphone platforms in the UK.
It is proposing that access to Apple’s contactless payment technology on iPhone should be made available to businesses in the UK on terms that allow them to compete effectively.
Under the proposed changes, Apple would be required to provide access through the main contactless technology standards used internationally, and to lower its access fees so that companies could compete commercially with Apple’s own contactless payment products.
This will allow iPhone contactless payments to be more effectively utilised by third-party wallets and payment platforms, digital ID tools, ticket apps, and loyalty programmes.
“We have heard that high fees, strict terms, and technical restrictions relating to Apple’s contactless technology make it too difficult for challengers to innovate and compete,” said CMA chief executive Sarah Cardell.
“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.”
