Apple faces 1.5 billion pound UK lawsuit over Apple Pay fees

Daley, founder of consumer advocacy organisation Fairer Finance, claims that Apple has maintained exclusive control over contactless payments on iPhones by restricting competitors' access to the near-field communication chip in its devices. This marks the first major group lawsuit specifically targeting Apple Pay in the UK and represents a significant escalation in regulatory scrutiny of the company's payment practices.

The monopoly allegations

The core of the lawsuit centres on Apple's control of the NFC technology embedded in iPhones. This chip enables contactless payments by allowing devices to communicate with payment terminals. According to the legal filing, Apple has kept this technology locked exclusively to Apple Pay, preventing rival digital wallet services from offering contactless payment options to iPhone users.

Until October 2024, Apple maintained complete restriction of NFC access to third-party developers in the UK. Whilst the company has opened NFC access to competitors in the European Union following pressure under the Digital Markets Act, those commitments are not legally binding in the United Kingdom. This means iPhone users in the UK have effectively had no choice but to use Apple Pay if they want to make contactless payments with their devices.

Hidden costs passed to consumers

The lawsuit alleges that Apple charges fees to banks and card issuers for every contactless and online transaction processed through Apple Pay, approximately 0.15 percent per transaction. Whilst Apple does not charge consumers or merchants directly, the legal claim asserts that these costs are ultimately transferred to all banking customers through higher fees on current accounts, credit cards, savings products, and mortgages.

James Daley stated that people will have no idea they have been paying more for everyday banking because of the way Apple has operated Apple Pay. By shutting out competition and charging hidden fees, the campaigner argues that Apple has pushed up costs for millions of consumers.

Crucially, the lawsuit contends that these higher costs affect virtually all UK banking customers, not just iPhone owners. The legal filing indicates that approximately 98 percent of UK consumers hold accounts with banks that have cards registered on Apple Pay. Unlike Apple, Google does not charge comparable fees for contactless payments made through Android devices, according to the claim.

Apple's defence

Apple has firmly rejected the allegations, calling the lawsuit misguided and urging its dismissal. In a statement, the company emphasised that Apple Pay is a seamless and secure way for users to make contactless payments and represents one of many payment options available to consumers. The company stated that it does not charge fees to consumers or merchants for using Apple Pay, and that banks see meaningful benefits from offering Apple Pay to their customers, most notably fraud reduction.

The case is being handled by law firm Milberg London and funded by Omni Bridgeway. It follows Apple's October 2025 defeat in a separate UK class action over App Store fees, where the Competition Appeal Tribunal ruled the company abused its dominant market position by charging developers excessive and unfair commissions of up to 30 percent. Apple is appealing that ruling.

Regulatory scrutiny intensifies

The lawsuit arrives as UK regulators including the Competition and Markets Authority and the Payments Systems Regulator have intensified their examination of digital wallet services and the market power of major technology firms. The regulatory landscape has been shifting, with increased focus on whether technology companies are leveraging their platforms to restrict competition and impose hidden costs on consumers.

The case raises fundamental questions about the relationship between technology platforms, financial services, and consumer costs. It challenges the notion that free-to-consumer services have no economic impact, arguing instead that costs can be systematically hidden within banking fee structures.

What happens next

If successful, affected consumers could receive approximately 26 pounds each in compensation. However, the Competition Appeal Tribunal must first decide whether the case can proceed as a full class action, a process that could take years to resolve. The tribunal will need to determine whether the legal arguments have sufficient merit and whether the proposed class of affected consumers is appropriately defined.

The outcome of this case could have significant implications for how digital payment platforms operate in the UK and may influence regulatory approaches to technology companies that control access to hardware features essential for financial services. It also adds to the mounting legal and regulatory challenges facing Apple in multiple jurisdictions over its business practices and platform policies.