Apple (AAPL) is preparing to fight a UK push to open iPhone tap-to-pay to rival wallets, the Financial Times reported on Friday, October 16. The Competition and Markets Authority (CMA) is set to publish consultation proposals that would let iPhone users choose a wallet other than Apple Pay for contactless payments. People cited by the FT said Apple is likely to challenge them in court.
Nothing is decided. The CMA hasn’t published the proposals yet, and it has to consult before it can impose any requirement.
Why the CMA Is Going After Apple Pay
Apple already sells UK developers access to the iPhone’s payment chip. Its NFC & SE Platform launched in the UK in October 2024, but the CMA’s call for evidence said it had seen no UK product launches using it, and pointed to high fees and technical differences between platforms as barriers. The regulator is now weighing both what access should cost and how it should work.
Europe already went further. In July 2024, Apple agreed with the European Commission to give rival wallets free access to iPhone tap-to-pay across the EEA for 10 years. In the UK, Apple also faces a class action on behalf of 50 million consumers alleging its NFC lock let it overcharge banks.
What AAPL Stock Has Riding on Services
Apple doesn’t break out Apple Pay revenue. It sits inside Services, the part of Apple driving its profit growth. Services revenue rose from $68.43 billion in fiscal 2021 to $109.16 billion in fiscal 2025, up 60%, while total revenue grew 14%. That lifted Services from 18.7% to 26.2% of sales.
Services kept about 75% of sales as gross profit in fiscal 2025, against about 37% for products, according to Apple’s annual report. That mix shift is why Apple’s overall gross margin climbed from 41.8% to 46.9% over the same five years. Services made up 26% of sales but about 42% of gross profit.
The UK Alone Won’t Dent Apple’s Numbers
The direct hit is small. Apple doesn’t report UK sales on their own, and its whole Europe segment, which includes the UK, brought in $111.03 billion in fiscal 2025, or 26.7% of revenue. Apple Pay fees from British banks are a sliver of that.
The precedent is the bigger risk. If the UK follows Brussels, Apple loses tight control of tap-to-pay in two large markets. Wallet providers such as PayPal (PYPL) would gain a route onto iPhones on better terms. Alphabet (GOOGL), whose mobile platform the CMA also oversees, already lets rival wallets use tap-to-pay on Android, which makes Apple’s security argument harder to sell.
The Fee Apple Hasn’t Been Told Yet
The real unknowns are the price and the technical terms of access. Apple already offers paid NFC access in the UK. The EU went furthest, requiring free access through host card emulation, the method most rival wallets use. If the CMA lands on low fees and workable technical terms, rival wallets get a real path onto iPhones and Apple’s leverage over UK banks shrinks. If it lets Apple keep a fee tied to Apple Pay’s own charges, much less changes.
None of this reaches Apple’s earnings soon: the CMA still has to publish, consult and decide, and a court fight may follow. For Apple stock, what matters is the fee in the CMA’s proposal and whether other regulators copy it.
Want to track how much of Apple’s growth depends on Services? Pull up the same revenue split and segment data on TIKR for free, and see how the mix has shifted over the past decade. Learn more here.
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