CMA proposes broader iPhone contactless access for rival wallets

Britain’s Competition and Markets Authority proposed new iPhone contactless-access requirements on 20 October, seeking to make competing payment apps commercially viable. It expects substantially lower access charges, but is consulting on pricing principles rather than setting a tariff.[1]

For a broker or fintech considering payments inside its own app, the commercial question is whether the customer relationship can support another service. A payment feature introduces an everyday use for an account, but also adds support demands and a new reason for customers to judge its reliability. Platform access is one input into that business case.

Technology choice changes the route to market

The CMA wants Apple to offer both Secure Element access, which uses protected on-device hardware, and host-based card emulation, or HCE. It says the UK currently has no rival wallet-type launch comparable to those seen in the EU. That is the regulator’s assessment of market entry, rather than a finding that developers have no technical access today.[1]

Apple’s current platform supports eligible apps becoming the default contactless app, including launch through a double-click or presentation to a terminal. Access requires an agreement and entitlement. For in-store payments, the developer must have the relevant permission or a binding arrangement with an authorised payment-service provider. Apple also requires security and privacy controls, and an accredited laboratory review of the Secure Element applet.[3]

A fee structure can determine whether a small wallet scales

The draft would assess fees against cost, value, flexibility and administrative simplicity. It would exclude double-counted costs and expenditure on Apple’s own downstream services. Fee structures would have to reflect usage patterns, emerging use cases and whether each tap generates revenue; developers could move to a more appropriate structure.[2]

That flexibility matters to the economics of an infrequently used financial app. A fixed charge per enrolled customer falls on dormant and active wallets alike. A usage-based charge follows transactions but can consume the margin on each payment. The relevant comparison is the total cost per active customer over time, including the customer-service and technology work needed to keep the feature operating.

The EEA precedent is narrower in a different way. The Commission’s July 2024 commitments cover in-store wallet competition, default-app functionality and independent review of access decisions, with a ten-year duration. They apply to EEA developers and users within the defined scope. The UK consultation therefore cannot be read as an automatic extension of those commercial terms.[4]

Security remains part of the dispute

The consultation records Apple’s concerns about HCE malware, impersonation and relay attacks. The CMA supports offering both technologies. The draft preserves a proportionate power to interrupt access for credible serious harm arising from breaches of law or industry standards. It also proposes publishing access terms and normally giving at least 30 days’ notice of changes, except fee reductions.[2]

Those terms would affect investment risk as well as the price of a tap. A provider may need to commit engineering resources and sign supplier contracts before it has an active customer base. Clear access criteria, notice periods and a documented interruption process would make those commitments easier to evaluate; the eventual remedy still has to work in day-to-day implementation.

Providers are already building the supporting services

Mastercard introduced Wallet Services on 15 July, combining software tools and services for contactless capabilities on iOS and Android. Its published description includes a Secure Element applet and developer kits, and it says partner banks are developing wallet features. Consumer rollout in selected markets was an expectation for year-end, not evidence that every announced integration had reached customers.[5]

For firms buying that kind of infrastructure, the decision involves several counterparties: the mobile-platform operator, the payments provider and the technology supplier. A cheaper platform agreement could leave integration or support costs largely unchanged. Conversely, reusable software across operating systems could improve the business case even where customer adoption starts slowly. The strongest commercial test is sustained use at an acceptable total operating cost.

The consultation closes on 17 November. A final decision follows the assessment of responses, so firms cannot yet price an implementation plan from a settled UK tariff or effective date.[1]

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