Big Tech faces new rules on payments and digital wallets
Major tech firms face new regulations targeting digital wallets and payment apps, impacting over 13 billion annual transactions.
A significant step in financial regulation will see major tech companies processing over 13 billion transactions annually subject to closer oversight. The US Consumer Financial Protection Bureau (CFPB) has finalised a rule bringing digital wallets and payment apps under the same scrutiny as banks. The move aims to enhance consumer privacy protections, combat fraud, and ensure fair account management.
The rule, targeting services like Apple Wallet, Google Pay, and Venmo, signals a shift in recognising digital payments as essential consumer tools. CFPB Director Rohit Chopra emphasised the need for oversight that reflects the growing reliance on these services. The measure, first proposed a year ago, has undergone substantial revisions to refine its scope and application.
Only companies processing over 50 million transactions annually will fall under the rule, a change from the initially proposed threshold of 5 million. Moreover, the regulation focuses solely on transactions in US dollars, excluding digital assets from its purview. Critics, including the Financial Technology Association, argue that the rule lacks a clear justification, though some in the banking industry support its introduction.
Set to take effect 30 days after its publication in the Federal Register, the rule has sparked debate over its future under a changing regulatory landscape. With the growing role of digital payments in daily life, the rule marks a pivotal moment for the industry and consumer protections alike.