Apple could be forced to open access to its contactless payment system to rivals under new proposals from the competition watchdog.

The Competition and Markets Authority (CMA) is consulting over proposals which would make it easier for firms to access Apple’s key mobile contactless technology, known as near field communication (NFC).

CMA boss Sarah Cardell said firms have told the regulator that “high fees, strict terms, and technical restrictions” from Apple are making it “too difficult” for challengers to innovate and compete.

The proposals are also expected to result in lower access fees, the regulator added.

The CMA said its research found that Apple Pay has become the most popular choice of digital wallet in the UK for adults making mobile payments.

However, banks and other payment firms have raised concerns over the fees charged by Apple.

In the EU, Apple has already been required to remove fees and allow access to the contactless chip in iPhones, leading to the launch of alternative mobile wallets from firms including PayPal.

An Apple spokeswoman said: “Apple has made it possible for developers in the UK and around the world to securely offer contactless transactions directly within their apps through the NFC and SE Platform – for everything from in-store payments and transit passes to car keys and event tickets.

“This solution enables developers and banks to create innovative products and services for their customers and facilitates competition between wallets, while ensuring users’ sensitive data remains protected by the highest security standards.

“We do not believe the CMA should require Apple to adopt an approach with lower privacy and security protections.

“We will continue to engage constructively to reach an outcome that is in the best interest of our users.”

Ms Cardell said: “These proposals open the door to more innovation, more choice and economic growth, including in the UK’s important fintech sector.

“By removing barriers to entry, we can help create the conditions for brilliant British businesses with great ideas to develop new products and services here – from payment apps and digital IDs to travel passes and digital keys.”

David Geale, executive director for consumers, payments and competition at the FCA, said: “We welcome steps the CMA has taken to boost competition and innovation.

“Improved access and substantially lower fees should create greater competition and more choice for consumers and businesses.

“Opening up this technology will also support the expansion of open banking, enabling more people to make payments directly from their bank accounts.”

The CMA will close the consultation on Tuesday November 17.