In its first significant action under a new director, the Consumer Financial Protection Bureau is ordering Apple, Amazon, PayPal and other tech giants to change how their proprietary payment networks work.

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Apple Pay, Google Pay, and other payment systems created by big tech companies now dominate the bulk of e-commerce and person-to-person payments. CFPB director Rohit Chopra is calling for more transparency, as well as more information on what consumer protections have been put in place.


The CFPB also raised potential antitrust concerns.

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“Big tech companies are eagerly expanding their empires to gain more control and insight into our spending habits,” Chopra said in a prepared statement.

Prior to being confirmed as director last month, Chopra was a commissioner on the Federal Trade Commission, where she used her role to raise concerns about anti-competitive behavior at large technology firms. He also raised the issue during his confirmation hearing in the Senate Banking Committee.

CFPB has canceled or reduced many policies imposed by the Trump administration. And the bureau is adding staff in anticipation of taking a more active role in regulation and enforcement, as it did during the Obama administration.

Over the past decade, technology companies have launched full-featured payment systems and networks such as Apple Pay, AliPay and Google Pay, which are often embedded in smart devices. Apple sells its Apple credit card product inside the iPhone, and if a consumer opens an account, it is automatically integrated into the customer’s payment options. In many ways, a consumer’s smart phone has replaced their wallet.

While the innovation has been largely celebrated by those using it, banks and consumer groups have raised concerns about tech companies running their own independent payment networks. While banks have tried to compete with Silicon Valley in payments through services such as Zelle, they have struggled to keep up and the integrated system is not the Apple or Google-powered one that is seen to have a competitive advantage. Consumers can add their credit or debit cards to their iPhone or Android devices, but this usually requires additional steps.

Richard Hunt, CEO of the Consumer Bankers Association, a trade group, said: “Since the bureau’s inception, an increasing share of banking activity has fallen outside the purview of major regulators, jeopardizing the resilience of consumers and the financial system.” For the country’s largest consumer banks.

The CFPB, in its letter to companies, sought information about how their products store consumer information, how the data is collected or sold or shared with other companies, as well as how consumers’ information is used by them. How to sell additional products can be done.

The Electronic Transactions Association, which represents Apple, Amazon, Google and other technology companies in terms of payments, said they plan to fully cooperate with the CFPB’s order.

“The digital transaction industry has a great story to tell about its efforts to protect consumer data,” said ETA CEO Jody Kelly in a prepared statement. We look forward to working with Director Chopra and the CFPB on this important endeavor. Let’s hope.”