The news: Apple is headed for a legal fight over its tap-to-pay technology in the UK, per the Financial Times.

The Competition and Markets Authority will reportedly publish a proposal arguing that Apple’s control over its NFC technology is anticompetitive. 

Apple will likely challenge that decision in court.

Why this matters: Digital wallets have the third-largest share of in-store payment value in the UK, per Global Payments’ Global Payments Report.

• Debit cards accounted for 43% of all UK point-of-sale (POS) value.
• Credit cards made up 24%. 
• And digital wallets snagged 20%.

A court decision to loosen Apple’s grip on its NFC tech could help rival wallets gain more tap-to-pay share at the POS.

Implications for wallets: If Apple is forced to open its NFC tech to competitors in the UK, true competitive offerings may be slow to appear. Take the EU: It mandated broader NFC access more than two years ago—and few contactless wallets have emerged beside Vipps and limited European rollouts for PayPal and Klarna.

At the same time, competitors are going to face Apple’s iPhone popularity in the UK: 22.2 million UK adults are iOS smartphone users, per our forecast. Apple Pay has natural advantages being the native wallet for its iOS hardware, another hurdle for outside competitors to combat after more than a decade of uncontested dominance. 

Rival wallets will have to create strong incentives to override UK consumers’ familiarity with Apple Pay and its device advantages for iPhone users.

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