Big Tech Firms Push Back Against Regulatory Oversight of Digital Wallets

A US lobby group representing the interests of Big Tech firms has criticized proposals by the Consumer Financial Protection Bureau (CFPB) to regulate tech giants like Apple and Google, who offer digital payment apps and wallets, according to Finextra.

In November, the Bureau unveiled a proposed rule aimed at subjecting non-bank financial companies handling more than five million transactions annually to the same regulations as large banks and credit unions.

This rule would encompass approximately 17 companies, with Google, Apple, PayPal, and CashApp operator Block being the most notable. These firms would be required to adhere to relevant funds transfer, privacy, and other consumer protection laws.

The Computer & Communications Industry Association (CCIA), in its written response, argues that the current regulatory proposal lacks clarity in identifying specific risks it aims to address. Instead, it vaguely mentions the possibility of «new risks» arising from «new product offerings» without explicitly defining these potential risks.

Krisztian Katona, the vice president of global competition and regulatory policy at CCIA, comments, «As the CFPB considers further regulations on digital services, it’s essential to note that consumer feedback indicates a general satisfaction with payment services, suggesting the absence of a market failure in the sector.»

Katona goes on to say, «We would urge regulators to tailor new regulations to specific problems they aim to resolve. Broad, overly burdensome, or heavy-handed digital regulation could significantly impede new startups in this industry and potentially harm U.S. innovation and economic growth.»

In this ongoing debate, Big Tech firms are pushing back against what they perceive as excessive regulatory oversight, emphasizing the importance of striking a balance between consumer protection and fostering innovation in the digital payment sector.