Apple Pay under investigation in U.K. amid ‘seismic shift’ in consumer behavior

Two U.K. regulatory bodies have announced a joint investigation into the benefits and risks of digital wallets, including Apple Pay, Google Pay, and PayPal.

In a press release Monday, the Payments Systems Regulator (PSR) and Financial Conduct Authority (FCA) launched what they describe as a “call for information” as they seek to understand changes to the consumer landscape. Noting that the proportion using digital wallets has risen steeply–now likely above half of U.K. adults, they said–the authorities detailed areas of interest and concern, including the benefits such wallets bring to users, features that don’t work as well as they might, and their effect on competition and the integrity of the free market.

“Digital wallets are steadily becoming a go-to payment type, and while this presents exciting opportunities, there might be risks too,” wrote PSR managing director David Geale. “Collaboration between regulators and working with industry is crucial to ensure we’re on the front foot to support innovation and competition.”

Although Apple is only one of the firms explicitly mentioned in the press release, which also includes Google Pay and PayPal, the timing of this announcement suggests regulators may be particularly interested in monitoring the influence on free competition exerted by Apple Pay. As Bloomberg notes, it comes only days after Apple successfully avoided being fined by the European Union by opening up its tap-to-pay tech to other payment service providers.

The U.K. is no longer a member of the European Union but follows its lead in many regulatory matters. And any mandates overseas are likely to affect Apple’s operations in the U.S. as well.

The regulators said they are “interested in hearing from stakeholders across the payments and wider financial services landscape, including digital wallet and technology providers as well as their service users and other parties with an interest in digital wallets.” Respondents have until September 13, after which the authorities pledge to consider all feedback and issue an update by the first quarter of 2025.