Big tech concerned about new payment services regulations

New U.S. payment service regulations could also affect Big Tech services. Big companies like Google and Apple have started a lobbying effort.

The US government wants to achieve greater oversight of payment services. According to a proposed new regulation of payment companies by the U.S. Consumer Financial Protection Bureau (CFPB), oversight of these payment services should be significantly improved.

According to the consumer watchdog, payment services currently collect a great deal of personal data from consumers without oversight. This could create a system where the lines between payments and commerce are blurred, creating incentives for excessive surveillance and financial censorship.

CFPB Chairman Rohit Chopra even makes a comparison to the surveillance system used by the government in China.

Stricter supervision also for fintech

The bill proposes stricter supervisory measures for payment service providers that process more than five million transactions annually. In doing so, the CFPB makes no distinction between services offered by traditional banks and those offered by online payment services or fintech companies.

The latter announcement, in particular, has caused a lot of unrest at Big Tech, especially Google and Apple, writes Het Financieele Dagblad. Think about payments made through Google Pay or Apple Pay, but also, for example, through other providers with platforms such as Venmo and Cash App from the payment company Block.

Online payment services in the U.S. have been under fire for some time for their lack of privacy-oriented business practices, and sometimes, these types of online payment companies actively have policies that are not privacy-oriented.

Substantial debate

Discussion of the U.S. consumer regulator’s proposal is now leading to fierce debate. Besides, tech companies fear the CFPB will station regulators at their headquarters.

The banking industry, however, welcomes the plans. The banks believe fintech companies should be subject to the same rules as they are. Online payment service providers, however, feel that banks should adapt and become fintech providers as well. After all, fintech companies would provide services consumers want and cannot get from their traditional banks.

A final decision is still pending for now. A consultation round is currently underway.

Tip: EU wants patronizing rules against endless scrolling on smartphones