Apple, Google, Other Big Tech Firms Snub US Watchdog's Proposal To Oversee Digital Wallets & Payment Apps

The Computer & Communications Industry Association (CCIA) warned that the initiative could impede innovation and exclude some players from the market.

In a comment letter addressed to the CFPB, the CCIA argued that the proposal lacked specificity in identifying the consumer risks it aimed to address.

Source : Getty

A lobby group representing major tech companies, including Apple, Google, Amazon, Meta, and X (formerly Twitter), has raised concerns about a proposed plan by the US Consumer Financial Protection Bureau (CFPB) to oversee digital wallets and payment apps. The Computer & Communications Industry Association (CCIA) warned on Monday that the CFPB's initiative, aimed at regulating tech giants providing smartphone payment services, could impede innovation and exclude some players from the market.

The CCIA, in response to the November proposal by the CFPB, argued that subjecting companies in this sector to the same level of supervision as banks might have unintended consequences. The CFPB's plan, which is yet to be finalised, would involve agency examiners scrutinising compliance with laws governing deceptive practices, privacy protections, and executive conduct. The proposal, in its current form, is expected to cover 17 companies responsible for 13 billion payments annually.

While some representatives from the banking industry have expressed support for the CFPB's proposal, emphasising the need to regulate companies providing bank-like services, Krisztian Katona, the CCIA's head of regulatory policy, cautioned against overly burdensome digital regulation. Katona stated that such regulation could potentially hinder new startups in the industry.

In a comment letter addressed to the CFPB, the CCIA argued that the proposal lacked specificity in identifying the consumer risks it aimed to address. The letter also criticised the view that non-bank digital providers and banks are direct competitors, emphasising the market's reality of their synergies benefiting consumers with complementary services.

Additionally, the Financial Technology Association, which includes members like PayPal and Block Inc, echoed similar concerns in a separate comment letter released on Monday. The association argued that existing regulations were adequate and called for the suspension of the CFPB's rulemaking process.