Big technology companies offering digital payments and related wallets will be subject to tighter monitoring in the future. The US consumer financial protection agency CFPB (Consumer Financial Protection Bureau) has adopted new rules, which means that in the future companies like Apple and Google will be treated like banks with their wallets for mobile payments. It aims to ensure greater data security for users and provide them better protection from financial fraud.
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The CFPB recently fined Apple Card and Goldman Sachs a million dollars for taking advantage of customers. The MasterCard credit card, which has been marketed by Apple in the United States since 2019 and issued by Goldman Sachs Bank, was plagued with problems. The Apple Card was advertised as offering interest-free installments for purchases of iPhones and other Apple products, but this was not automatically provided.
The CFPB has always been able to order such enforcement actions for organizations other than banks, but with the orders passed Thursday New rules for digital payment transactions Active monitoring of related companies is also possible. The aim is to ensure that providers of digital payment options comply with laws and that any risks can be identified at an early stage.
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“Digital payments have moved from a novelty to a necessity, and our oversight should reflect this reality,” said CFPB Director Rohit Chopra. Consumers will now make digital payments totaling over Rs 13 billion within a year. In addition to protecting against data loss and fraud, the new rules should also include liability in the event of loss of digital wallets.
The CFPB introduced new rules last year, but they were adjusted before they were passed. Initially, 5 million digital transactions were planned that companies would have to process per year to fall under the new rules. Now it is 50 million. Furthermore, it only applies to transactions in US dollars. First, the CFPB wanted to broaden it to include digital assets that can be used for purchases.
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The CFPB did not specify which companies would be covered by the new rules, but CFPB staff are waiting to hear from Reuters reportSeven unnamed non-banks were affected, covering 98 percent of all market activity.
positive and negative feedback
Some members of the financial industry welcome the new rules because anyone who provides banking services should be regulated like a bank. However, the Financial Technology Association (FTA), which includes Amazon Pay, eBay, PayPal, and Wise, is calling on the CFPB to withdraw the regulation because it does not clearly address any of the problems identified.
The new rules will take effect 30 days after publication in the Federal Register, the official journal of the United States federal government.
(FDS)
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