Major digital payment providers (e.g. Apple Pay, Cash App) will soon be subject tobank-like oversight by the U.S. Consumer Financial Protection Bureau (CFPB). The CFPB has issued a final rule that will regulate digital payment apps that process more than 50 million transactions each year. This means that oversight will apply to all major providers, including Apple Pay, Google Wallet, PayPal, Cash App, and more.
The new rule is intended to ensure that digital payment providers comply with the same laws that credit unions and big banks follow. Thanks to this change, the CFPB will have the authority to oversee providers’ compliance with federal laws related to privacy, fraud and more.
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“Digital payments have gone from a novelty to a necessity, and our oversight must reflect that reality,” said CFPB Director Rohit Chopra. “Oversight will help protect consumer privacy, protect against fraud , and prevent the illegal closing of accounts.”
The growing influence of technology and fintech in the financial industry has prompted the CFPB to expand its oversight to include digital payments. It must ensure that consumers are adequately protected when using these services and that fair competition is maintained in the marketplace.
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For consumers, this new regulation means increased protection and transparency when using digital payment services. They can expect clearer information about fees and terms, as well as the assurance that their personal and financial data is handled securely.
However, some critics argue that these regulations may also result in higher costs for consumers, as companies may manage compliance costs through fees or charges. It remains to be seen how this new oversight will ultimately affect the consumer experience.
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The rule is set to take effect 30 days after its publication in the Federal Register.
Source: www.theverge.com
