The CMA may copy Europe's tap to pay model, leaving Apple and rivals to fight over the fee
The FT reports the CMA will likely recommend a European style system for iPhone tap to pay. No new product has launched on Apple's paid UK chip platform in 18 months, so the access fee will decide whether it works.
The Competition and Markets Authority (CMA), the UK competition regulator, is set to publish proposals next week, according to the Financial Times. Its sources say the CMA will argue that Apple abuses its power over tap to pay and recommend a European style system. Apple would open NFC chip access so other wallets can be the default. Two people briefed on the matter told the paper that Apple is likely to challenge the proposal in court.
Opening access is only half the question. The other half is the price Apple may charge a rival wallet for the phone's contactless chip. The UK paper treats the fee separately from the European style access rule. Cost plus is the pricing method that fits that model.
Europe's answer was free, but the CMA has signalled that free is hard to defend in the UK. Apple's critics will first suggest a discount to what Apple charges on Apple Pay. Cost plus means Apple's cost of providing access plus a return. The CMA's own paper gives the strongest evidence for it.
The stakes for Apple are high. The FT's sources say the designation behind the case lasts five years. Fines for breaching the rules can reach 10% of global turnover.
The same handset runs under two regimes. In July 2024 the European Commission accepted commitments from Apple. Apple would provide this access for free, using host card emulation, known as HCE, within the European Economic Area. HCE lets an app act like a payment card in software. The CMA records that PayPal, Curve and Klarna apps are live in the EU, where access is free.
The UK went a different way. In October 2024 Apple opened its NFC and Secure Element platform to anyone who accepts its terms. NFC, near field communication, is the radio behind tap to pay, and the Secure Element is a protected chip inside the phone. The terms include paying a fee that Apple's developer page does not state.
The CMA writes that it has seen no new products or services launch in the 18 months since. It says the current fees are likely a significant barrier to entry.
That evidence supports intervention, but the CMA stops short of a zero fee. In paragraph 47 it says any intervention must be proportionate, including in the level of fees. That, it says, "may preclude requiring the provision of services for free unless there is clear justification to support this."
Apple will hold the CMA to that sentence. The regulator blames fees for the lack of new products while protecting Apple's incentive to invest. Its fee floor therefore sits above zero.
The CMA's paper considers three ways to price access, and treats them unequally. Value based pricing fails first. It sets a fee by what the access is worth. The CMA says direct observation of value is effectively impossible, at least on iOS. Apple has historically restricted access, so there is no free market price to observe.
Card emulation was widely used by wallets, including Google Wallet, before Apple Wallet launched. So Apple's incremental contribution would need to be disentangled from older standards. A fee built on a quantity nobody can observe will be argued over for years. The CMA says it must consider whether it is appropriate to rely on value at all.
Linking the fee to Apple Pay is tempting because it provides a ready number. The CMA suggests using the prices Apple Pay charges business customers as a reference point, perhaps with a standard discount. The FT adds that banks and fintechs have complained about the 0.15% cut Apple takes on credit card charges through Apple Pay.
The CMA names the flaws in that method itself. There is no easy way to pick the discount, and there is no equivalent product for new uses. It also risks embedding Apple's market power in the access fee.
The 0.15% appears to be a different charge from the one a wallet developer would pay for chip access. A discount to Apple Pay prices would still import the pricing power the designation was meant to constrain. Apple would then argue about the size of the discount.
Cost plus, the third method, avoids both problems. It prices something Apple can document, the cost of providing access, and adds a return. The CMA says that return would reflect the case's circumstances, including the risks Apple took and its incentives to innovate.
The paper says the CMA will continue to explore a well calibrated cost plus approach. The return is still open, and the paper describes exploration rather than a decision. The approach could allow efficient entry by rivals to Apple Pay while keeping Apple fairly paid. Its draft steering rules already pair cost plus with value as a cross check.
The fee still matters under a European style system. Europe's free access came from commitments Apple offered. A UK order has to survive the proportionality test in paragraph 47. A narrow cost fee sits close enough to zero to answer the European comparison. A broader fee with a return gives Apple the defence that paragraph 47 invites.
Technology choice runs into the same fee. HCE only implementation carries a relatively limited cost but a finite number of offline transactions. Secure Element only would likely be quick, since the chip is already in UK handsets. Supporting both would very likely be more costly, in particular for Apple.
Wallet builders that already ship HCE in the EEA have the cheapest route. The CMA expects translating that work to the UK to be more straightforward. The FT reports that competition authorities see British consumers missing out because providers will not build separate wallets for Europe and the UK.
The fee formula matters more to the build decision than the technology rule. A narrow cost fee would make either route affordable. A deep discount to Apple Pay, or a broad cost plus return, would leave the barrier close to where it is.
Apple has held strategic market status in its mobile platform since the October 2025 final decision. That is the CMA label for a firm with entrenched power. It gives Apple a statutory path to fight, with proportionality the natural ground.
The CMA's call for evidence closed on 21 July. It said measures would come forward for consultation in Autumn 2026, after an assessment of effectiveness and proportionality.
If next week's proposals follow the European model, the dispute will be the fee clause. A cost based formula with a stated return would let rival wallets plan around a number, even if Apple appeals. A consultation has to close before anything binds. UK users should not expect a rival wallet on the iPhone until then.