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Big Tech firms begin fight back over regulatory oversight of digital wallets

A US lobby group representing the interests of Big Tech firms has hit out at proposals by the Consumer Financial Protection Bureau to regulate tech giants such as Apple and Google that offer digital payment apps and wallets.

  3 5 comments

Big Tech firms begin fight back over regulatory oversight of digital wallets

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

In November, the Bureau published a proposed rule that would see non-bank financial companies that handle more than five million transactions per year face the same rules as large banks and credit unions.

The rule would cover around 17 companies, most notably Google, Apple, PayPal and CashApp operator Block. These firms would have to adhere to applicable funds transfer, privacy, and other consumer protection laws.

In its written response, the Computer & Communications Industry Association (CCIA) argues that the current regulatory proposal “fails to clearly identify a specific risk it seeks to address and merely identifies the possibility of ‘new risks’ from ‘new product offerings’ without explicitly stating what those risks might be.”

CCIA vice president of global competition and regulatory policy Krisztian Katona, comments: “It’s worth keeping in mind as the CFPB considers further regulations on digital services that consumer feedback seems to point towards a general satisfaction with payment services, which suggests the absence of a market failure in the sector.

“We would urge regulators to tailor new regulations to specific problems they want to fix as broad, overly burdensome or heavy-handed digital regulation could significantly hinder new startups in this industry, and harm U.S. innovation and economic growth.”

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Comments: (5)

Henning Holter

Henning Holter Director, Business Development at Star Global

This is the turkey voting for Christmas. Why shouldn't they be scrutinised and regulated? Is is better to wait until someone fails before putting safeguards in place?

A Finextra member 

"consumer feedback seems to point towards a general satisfaction with payment services, which suggests the absence of a market failure in the sector."

This is certainly not the case in the UK where 80% of the billowing authorised push payment fraud originates in Big Tech apps.

Big Tech wants unfettered access to granular consumer payment data to combine with its other sources of data, posing a major risk to consumer privacy and freedoms.

This is clearly an area where Big Tech needs to be reined in.

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

I totally agree with Big Tech and point regulators to the message emblazoned on the HP t-shirt: "No RISC, No Gain".

It's easy to mitigate the risk of AR by banning sales but there wouldn't be any businesses left to justify the existence of regulators in that case.

Of late, the Chopra-Khan-Gensler triumvirate in USA has gone rogue and it's high time the US administration reined them in.

A Finextra member 

Good points - the triumvirate to be wary of is the unhealthy connection between Big Tech, Big Government and Big Banking

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

Sure why not, since I'm not anonymous, my triumvirate allegiance should be obvious:).

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