The UK’s Competition and Markets Authority (CMA) plans to take action to compel Apple to lift restrictions preventing fintechs from offering their own digital wallets on iPhones.
This initiative follows the CMA’s decision to designate both Apple and Google with ‘strategic market status’ (SMS) in their mobile platforms, which include operating systems, app stores, and mobile browsers. With this designation, the watchdog has outlined possible actions aimed at fostering competition.
For Apple, the focus will be on addressing long-standing restrictions that limit competition with its wallet. The CMA aims to enhance interoperability to allow UK fintechs to introduce innovative digital wallets to the market.
Last year, Apple committed to opening up the NFC chip technology that enables iPhone users to make contactless payments to third-party providers in several countries, including the US and UK. However, it indicated that there would be associated fees, which emerged amid regulatory pressure and a deal with the European Commission to settle an antitrust case.
In the UK, stakeholders have informed regulators that NFC access isn’t the sole issue with Apple and Google wallets. The two companies maintain control over their mobile ecosystems, which allows them to direct consumers toward their own services through pre-installation.
Additionally, there’s a noted lack of competition among payment systems within wallets. Current pass-through wallets predominantly offer only card options, restricting the possibility for account-to-account payments, stablecoins, or future central bank digital currencies (CBDCs).
More generally, the CMA emphasizes that fintech is vital to the UK app economy and could benefit from clearer App Store review processes and the ability to guide users outside app stores for purchases.
CMA Chief Executive Sarah Cardell stated, “Apple and Google’s mobile platforms are crucial to the UK economy, impacting various aspects of daily life, from banking and shopping to entertainment and education. However, our investigation has revealed opportunities for greater innovation and choice.”
She added, “The targeted actions we propose today would allow UK app developers to lead in global innovation while ensuring a top-tier experience for UK consumers.”