Apple to Be Regulated Like a Bank
The U.S. Consumer Financial Protection Bureau (CFPB) has finalized a rule to regulate major technology companies offering digital payment services, including Apple, Google, and PayPal, similarly to traditional banks. This decision, effective 30 days after its publication in the Federal Register, applies to firms processing over 50 million transactions annually in U.S. dollars.
CFPB Director Rohit Chopra emphasized the necessity of this oversight, stating, "Digital payments have gone from novelty to necessity and our oversight must reflect this reality." The rule aims to ensure that digital payment platforms adhere to the same standards of fairness, transparency, and consumer protection as established financial institutions.
This regulatory move addresses concerns about consumer data privacy, fraud prevention, and the illegal closure of accounts associated with digital payment services. By subjecting these platforms to similar scrutiny as banks, the CFPB seeks to protect consumers in the rapidly growing digital payments sector.
The Financial Technology Association, representing companies like Amazon Pay and PayPal, has opposed the rule, arguing that it addresses no specific issue. In contrast, some banking industry representatives support the move, stating that providers of bank-like services should be regulated like banks.
The final rule includes significant changes from the initial proposal, such as raising the supervision threshold from 5 million to 50 million transactions annually and limiting the rule to transactions in U.S. dollars. These adjustments aim to focus regulatory efforts on the largest players in the digital payments market.
This development reflects a broader trend of increasing regulatory scrutiny over digital payment platforms globally. For instance, the European Union has settled its long-running antitrust investigation with Apple over the iPhone maker's mobile payment services, leading to commitments from Apple to allow third-party mobile wallet and payment services to use the technology behind Apple Pay.
As digital payments become more integral to daily transactions, regulatory bodies worldwide are adapting their oversight to ensure consumer protection and fair competition in this industry.
