The iPhone’s NFC Wall Is Cracking, but Apple Pay Still Has the Edge

Apple’s control over iPhone payments is finally facing a serious structural challenge. The UK’s Competition and Markets Authority wants rival payment providers to gain broader access to the iPhone’s contactless technology—and to let users choose an alternative to Apple Pay as their default wallet. That could weaken one of Apple’s most valuable ecosystem advantages. But opening the door is not the same as persuading anyone to walk through it.

The CMA opened a consultation on October 20, 2026, proposing access to iPhone NFC on fair, reasonable, transparent, and non-discriminatory terms, with responses due by November 17, 2026. The regulator says the change should produce “substantially lower access fees,” as Reuters reports. Apple is expected to challenge the proposals in court.

Apple’s real advantage is not just the NFC chip

The popular version of this dispute is simple: Apple owns the hardware pathway, so competitors cannot tap an iPhone at a terminal. That is true, but incomplete. Apple’s advantage is the combination of NFC access, the preinstalled Wallet app, default status, operating-system integration, and years of consumer familiarity.

The UK proposal addresses the first two pieces. Rival providers could get access to the contactless function and users could select another default payment service. That matters because a wallet that requires extra setup, a manual app launch, or a less visible place in iOS begins with a serious disadvantage.

The CMA’s own account of its work makes the broader issue clear: Apple’s mobile platform received Strategic Market Status in the UK on October 22, 2025, for five years, covering the operating system, app distribution, and mobile browsers. The regulator says its NFC work followed evidence-gathering with fintechs and financial-services firms about how access could support innovation. The CMA explains the process here.

In our view, that ecosystem advantage is more important than the radio itself. A rival wallet can be technically available and still effectively invisible.

Cheaper access is necessary, but it is not a business model

The proposal targets a practical barrier. Apple’s 2024 system in several countries, including the UK, lets payment companies use NFC under commercial agreements, security and privacy conditions, and associated fees. Banks and fintechs have also objected to the 0.15% fee Apple takes on credit card transactions made through Apple Pay.

That gives competitors a reason to complain, but not automatically a reason to invest. Building a wallet requires more than access to a contactless interface. Providers need a clear consumer proposition, issuer and merchant relationships, fraud controls, customer support, and enough scale to justify maintaining a separate iPhone product.

The existing market also includes different kinds of wallets. Apple Pay and Google Pay are “pass-through” wallets that tokenize payment cards, while services such as PayPal use a staged model in which funds are added to the wallet and transferred later. As Bird & Bird’s analysis explains, the distinction affects how these services connect with banks, card networks, merchants, and users.

That is why lower fees could produce a disappointing first wave of competition. If banks merely replicate Apple Pay with a different icon, most users will have little reason to switch. Apple’s product may remain the default not because rivals are blocked, but because it is convenient enough.

The most interesting opportunity is beyond card duplication

The more ambitious possibility is that opening wallets could encourage different payment methods, not just more card wallets. UK regulators and industry respondents have discussed account-to-account transfers and open banking payments, including the possibility of using digital wallets at physical points of sale.

This is where the policy could become genuinely important. A rival wallet that offers better control over bank accounts, clearer rewards, lower costs, or new ways to authenticate a payment would give users a reason to choose it. A clone of Apple Pay with a different brand would not.

There is a catch: alternatives to card payments are harder to explain and harder to standardize. Consumers understand tapping a card-backed wallet. They may be less interested in the plumbing behind an account-to-account transaction unless the benefit is immediate and obvious. Competition will therefore depend on product design as much as regulation.

Apple’s security argument should not be dismissed, either. The company has argued that restricting NFC access helps protect users and combat fraud. The answer cannot simply be “open everything.” The CMA’s proposed fair and non-discriminatory framework will have to preserve meaningful security and privacy requirements without turning those requirements into a new veto power for Apple.

The UK may win even before a rival wallet does

The best outcome is not necessarily a sudden replacement for Apple Pay. It may be a market in which Apple has to negotiate more seriously, reduce access costs, improve interoperability, and respond faster to payment innovations developed elsewhere.

The European Union has already pressured Apple to allow third-party wallets to interoperate with iPhone NFC, while the UK is pursuing its own consultation. That regulatory divergence could make the iPhone’s payment experience less uniform across markets, but it also gives providers more than one route to test new products.

Still, the burden now shifts to banks, fintechs, and payment networks. If they want the UK to have a credible alternative, they must build something better—not merely demand the same privileged position Apple has today.

Our verdict: the CMA’s proposal is a meaningful crack in Apple’s NFC wall and a sensible correction to an ecosystem bottleneck. But users should not expect instant Apple Pay competition. The winner will be the provider that turns access into a genuinely simpler, safer, or more useful payment experience. Until that happens, Apple Pay will probably remain the default by habit, even after the rules change.