The US Consumer Financial Protection Bureau has proposed that digital wallets such as Apple Pay should be regulated, and currently lack safeguards.
Apple Pay on an Apple Watch
The Consumer Financial Protection Bureau (CFPB) has been investigating Big Tech's digital wallets, including a "very careful look" at services such as Apple Pay Later. It's now proposing that 17 firms from Apple and Google, to PayPal and Block's CashApp, should be subject to supervision.
"Today's rule would crack down on one avenue for regulatory arbitrage," CFPB director Rohit Chopra told Reuters, "by ensuring large technology firms and other nonbank payments companies are subjected to appropriate oversight."
It's not clear precisely what regulatory framework the CFPB wants to install. However, Reuters reports that the regulator is focused on the privacy of financial transactions in particular.
Chopra says that its proposal for regulation would apply to companies handling in excess of five million transactions a year. It's not known how many transactions Apple Pay sees annually, but for 2022, the value of payments it processed was $6 trillion.
The CFPB is now accepting comments over its proposal, and this period is planned to conclude in early 2024.
Separately, this move by the US authorities to add monitoring and safeguards to digital wallets a similar plan in Australia. Apple has already objected to that expansion of regulation.,
"Apple believes the proposed expansion... will increase regulatory burden without aa net public benefit, give rise to... regulatory error," Apple said in October 2023, "and stifle the dynamic innovation that has characterised Australia's payment system over recent years."