IT News on October 21st: According to Reuters, on the 20th local time, the UK Competition and Markets Authority proposed a new plan that requires Apple to reduce fees and lift technical restrictions, in order to weaken Apple's control over the contactless payment sector and allow other payment services to compete with Apple Pay.
The UK Competition and Markets Authority stated that the new scheme is expected to significantly reduce the costs for developers to integrate Apple's contactless payment technology, while also lowering technical integration barriers.
The regulatory requirements in the UK are more lenient than those implemented by the EU in 2024. At that time, the EU required Apple to make its technology available to third-party developers for free. The UK Competition and Markets Authority stated that subsequently, companies such as PayPal, Klarna, Curve, and BBVA launched other payment applications one after another.
According to EU requirements, Apple must allow digital wallet developers to use host card emulation technology to directly access the near-field communication (NFC) chips of iPhone. With this technology, third-party applications can complete contactless payments without going through Apple Pay or Apple's wallet.
The UK's proposal requires Apple to further open up host card emulation technology to developers in addition to its existing security component technologies.
Last year, the UK Competition and Markets Authority determined that Apple and Google held a strategic market position in the smartphone market, and therefore had the legal authority to impose regulatory requirements on Apple.
Data from the UK Competition and Markets Authority shows that contactless payments account for 39% of the total volume of payment transactions in the UK, compared to just 3% ten years ago. Over 60% of British adults use digital wallets, with Apple Pay being the most commonly used among them.
Sarah Caddell from the UK Competition and Markets Authority believes that the new scheme will promote innovation, enrich consumer choices, and drive the development of the UK's fintech industry. "We have learned that the high fees charged by Apple for contactless payment technology, along with its stringent usage terms and technical restrictions, make it difficult for competitors to innovate and to compete with Apple."
The UK Competition and Markets Authority will seek public opinion on the new proposal, with the deadline being November 17th, before making a final decision thereafter.
Digital banks Revolut welcome the new proposal, believing that allowing developers to use NFC functions through host card simulation technology is of great importance. Revolut Chief Commercial Officer David Tildado said: "The proposal put forward by the UK Competition and Markets Authority creates an opportunity for UK fintech companies to compete fairly with large tech companies."
Apple, on the other hand, stated that developers can provide contactless payment services through existing NFC technologies and security components.
According to IT, security components are responsible for storing sensitive information such as bank card credentials and encryption keys. Apple claims that its existing technology can support services such as in-store payments, transportation cards, and event tickets, while also ensuring the security of user data.
An Apple spokesperson responded, "We believe that the UK Competition and Markets Authority should not force Apple to adopt a solution with lower levels of privacy and security protection. We will continue to actively participate in the negotiations to strive for a result that best serves the interests of our users."
