Consumer Financial Protection Bureau, Apple Pay, regulation

The US Consumer Financial Protection Bureau says it will apply rigorous oversight to Big Tech payment systems such as Apple Pay.

The Consumer Financial Protection Bureau (CFPB) recently fined Apple and Goldman Sachs a $90 million penalty over disputed Apple Card payments. However, it has long argued that digital wallet systems such as Apple Pay should be regulated like credit cards and banks are.

According to Reuters, the CFPB has now said it will step up its supervision of Big Tech companies. While CFPB did not name companies, it outlined plans for its oversight of payment apps and platforms.

"Digital payments have gone from novelty to necessity and our oversight must reflect this reality," CFPB Director Rohit Chopra announced. "The rule will help to protect consumer privacy, guard against fraud, and prevent illegal account closures."

The rule Chopra refers to is a threshold where technology firms whose digital wallets process more than 13 billion financial transactions annually, will be subject to the new oversight. The rule means that Apple Pay is included, as are others such as Google Pay, and Venmo.

Apple has not yet responded to this announcement in the US, but the new rule is similar to one it has previously objected to in Australia.

"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."

The CFPB did run a consultation process where firms such as Apple could present their arguments, and that process was originally due to conclude in early 2024. It's not clear whether that was extended, or what the timetable for implementing the rule is now.

It is possible that the new oversight rule may never come into force, however, because of the new Trump administration. Previously, the administration has accused the CFPB of overreach, and so it may yet block the move.

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14 Comments

Cesar Battistini Maziero 403 comments · 8 Years

About 2 days ago

Just today I was setting up a meal card on an Android. The card is not compatible with Google wallet or samsung pay.
The meal card company makes you use their own app that is slow and clunky. And only supports. their card.

On my iPhone, the same card was just a click on a button called add to wallet.

They are going to force the iPhone to become a mess just like Android.

bloggerblog 2515 comments · 16 Years

I had never felt so protected from late or missed payments as when using ApplePay, even my bank tries to sneak in a dollar here or there. ApplePay is my preferred payment method by far. The US Consumer Financial "Protection" Bureau is just another financial arm that wants to feel legit and cash grab like the EU.
Who do you think pays the $90M? Us the consumers of course!

Xed 2877 comments · 4 Years

bloggerblog said:

I had never felt so protected from late or missed payments as when using ApplePay, even my bank tries to sneak in a dollar here or there. ApplePay is my preferred payment method by far. The US Consumer Financial "Protection" Bureau is just another financial arm that wants to feel legit and cash grab like the EU.
Who do you think pays the $90M? Us the consumers of course!

Not only do I prefer Apple Pay when it's available, but since getting the Apple Card it's increasingly become my primary card everywhere Apple Pay is available. (save for a few specific types of usage where I get more than 2% to use a different card, like travel and fuel).

Additionally, I use Apple Cash as a middle man for moving cash between accounts without having those accounts directly connected and of course to send most people money. While I do wish there was a way to send money to Android users that was akin to Venmo , I don't want it to hinder Apple Cash in any way.

mpantone 2245 comments · 18 Years

Xed said:

bloggerblog said:

I had never felt so protected from late or missed payments as when using ApplePay, even my bank tries to sneak in a dollar here or there. ApplePay is my preferred payment method by far. The US Consumer Financial "Protection" Bureau is just another financial arm that wants to feel legit and cash grab like the EU.
Who do you think pays the $90M? Us the consumers of course!

Not only do I prefer Apple Pay when it's available, but since getting the Apple Card it's increasingly become my primary card everywhere Apple Pay is available. (save for a few specific types of usage where I get more than 2% to use a different card, like travel and fuel).

Additionally, I use Apple Cash as a middle man for moving cash between accounts without having those accounts directly connected and of course to send most people money. While I do wish there was a way to send money to Android users that was akin to Venmo , I don't want it to hinder Apple Cash in any way.

Well, enjoy your Apple Card now because Goldman Sucks is exiting the consumer banking industry which includes ditching Apple Card. Whether or not Apple can find another issuing bank to take over remains to be seen but there is almost zero chance that if a financial institution agrees to pick up Apple Card, they will not acquiesce to all of Apple's conditions. You will get fewer conveniences and benefits from whoever is the next issuing bank of Apple Card.

I'm glad for better regulation in this area. I never felt an issue with Apple Pay, but other services have been sketchy. Plus, if this leads Apple into creating a proper financial institution offshoot that can then service it's own credit card and other financial services that sounds like a win for consumers.