Apple Pay to Be Treated Like a Bank With Federal Scrutiny in the U.S.

[MacRumors]

The Consumer Financial Protection Bureau (CFPB) has finalized a new rule that will bring Apple Pay and other major digital wallet services under the same oversight as banks.

The CFPB today announced that, effective 30 days after its publication in the Federal Register, digital payment platforms processing over 50 million annual transactions in U.S. dollars will be subject to federal supervision. Apple Pay is one of the most widely used digital wallets in the United States and falls squarely within this threshold.

The new rule will grant the CFPB powers to proactively examine Apple Pay's compliance with federal consumer financial laws, including privacy protection, fraud prevention, and account stability. The CFPB has highlighted privacy concerns, fraud risks, disruption caused by account closures, and consumer protection as key areas of focus in its supervision.

While the CFPB already had some enforcement authority over Apple Pay, it previously relied on responding to violations or direct consumer complaints. The new regulation enables direct and ongoing scrutiny of internal operations, just like the oversight banks and credit unions face. Apple has not yet commented regarding the CFPB's finalized rule, but it did participate in the agency's consultation process, which considered input from stakeholders and financial technology companies.

The CFPB's move reflects a broader global trend toward regulating big tech's involvement in financial services. European regulators have similarly scrutinized Apple Pay, including its restriction of near-field communication (NFC) to its devices, which raised antitrust concerns. In the United States, the CFPB's decision is part of an effort to ensure that tech companies offering financial services comply with the same rules as traditional institutions.

Note: Due to the political or social nature of the discussion regarding this topic, the discussion thread is located in our Political News forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Article Link: Apple Pay to Be Treated Like a Bank With Federal Scrutiny in the U.S.

 

[WarmWinterHat]

Yes! Not that I have anything against Apple Pay (or Google Pay) but ANY financial intermediary between consumers
and consumers or consumers and business needs to be treated like a bank. No exceptions.

PayPal, for example, needs to have the ever-loving p**s regulated out of them.

 

[BigBellyBelcher]

About time but apparently CFPB is on the chopping block.

 

[wanha]

Tim just needs to book Mar-a-Lago for a couple of years and Trump will overturn this law with a single tweet /s

 

[klasma]

Tim just needs to book Mar-a-Lago for a couple of years and Trump will overturn this law with a single tweet

We’d be lucky if that’s the worst thing that will happen.

 

[scorpio vega]

PayPal, for example, needs to have the ever-loving p**s regulated out of them.

PayPal is so terrible. I legit only use them for paying through apps like DoorDash.

I can’t believe it’s still widely used

 

[I7guy]

Not all regulations are bad. Hopefully apple saw this coming years ago and has made strides to ensure its digital wallet is beyond reproach.

 

[CapitalIdea]

Apple will be fine. They don’t directly handle any money and fraud protections, account status and such are run through the banks themselves so all of that is in place. Apple has nothing to do with any of it.

 

[Radin.Y]

Tim just needs to book Mar-a-Lago for a couple of years and Trump will overturn this law with a single tweet

Ideally, Tim Apple shouldn’t see the need to do that. If they are as good and robust as they claim, audits and monitoring by CFPB should not bother them, instead give Apple more trust by consumers, which is good for both sides.

 

[Plutonius]

Sounds good on paper but I wouldn't put it past the government to inadvertently screw things up .

 

[blaureiter]

Apple (Google) are intermediates so all my transactions go to a debit card of a credit card (I do not provide bank routing numbers in the Wallet). That said, I would be more concerned about privacy. I have more confidence in Apple than Google but should I. I would assume Google tracks all transactions to better profile and sell advertisements, while Apple is not in that business.

 

[chrono1081]

Yes! Not that I have anything against Apple Pay (or Google Pay) but ANY financial intermediary between consumers
and consumers or consumers and business needs to be treated like a bank. No exceptions.

PayPal, for example, needs to have the ever-loving p**s regulated out of them.

It literally is backed by a bank though...

 

[sw1tcher]

Apple (Google) are intermediates so all my transactions go to a debit card of a credit card (I do not provide bank routing numbers in the Wallet). That said, I would be more concerned about privacy. I have more confidence in Apple than Google but should I. I would assume Google tracks all transactions to better profile and sell advertisements, while Apple is not in that business.

Yet. Apple is not in that business yet. Or that we know of.

But Apple is expanding more and more into the ad world.

Apple Further Expanding Into Ads, Now Directly Selling Ads in News App

Apple has started directly selling ads shown in the Apple News app, according to Axios. The report said that Apple News publishers will receive a...

www.macrumors.com

Next thing you know, we'll starting seeing ads in the Wallet app. It wouldn't surprise me one bit if it were to happen.

 

[GraXXoR]

If it walks like a bank and quacks like a bank…

 

[markgpearse]

Doesn't matter. The CFPB is on the chopping block. It will be gone by the end of January. I can hear Elizabeth Warren's shrieks from Texas.

 

[Amazing Iceman]

Scrutiny as in "I'm going to find 10,000 new ways to tax you".

 

[WarmWinterHat]

It literally is backed by a bank though...

I didn't say who it was backed by, I'm talking about the direct immediately should be treated like a bank, regardless of who is on either end.

 

[switz]

I would guess Apple gets a small percentage of every transaction to cover the costs associated with hosting the various different bank or other fiduciary credit/debit cards. Credit and the interest charges resulting from time payments are collected by the issuing entity.

So I see my Apple Card (issued by Goldman Sachs) as a convenience. However, I do wonder who actually refunds the 3% cash back on Apple gear purchases.

 

[sw1tcher]

So I see my Apple Card (issued by Goldman Sachs) as a convenience. However, I do wonder who actually refunds the 3% cash back on Apple gear purchases.

Apple pays that out

 

[HylianKnight]

PayPal is so terrible. I legit only use them for paying through apps like DoorDash.

I can’t believe it’s still widely used

I now only use PayPal for Steam.

 

[Ctrlos]

Apple (Google) are intermediates so all my transactions go to a debit card of a credit card (I do not provide bank routing numbers in the Wallet). That said, I would be more concerned about privacy. I have more confidence in Apple than Google but should I. I would assume Google tracks all transactions to better profile and sell advertisements, while Apple is not in that business.

Google Pay, even on top-end phones only works 50% of the time anyway. I had an S23, Pixel 8 Pro and Nothing 2a for review in the last year and in all of them I had instances where it would just not work, trip too early or require multiple taps. Apple Pay has, since its inception in 2014 been nothing but flawless.

 

[Avatar74]

This is pretty crucial in terms of interoperability as well. Having worked in this software space, and being a customer of numerous financial services, I can tell you that I have huge concerns when, for example, traditional financial institutions partner with payment systems and here's why: Your transaction is protected when it traverses the banking system, when it goes through SWIFT or FEDWIRE transfers, etc., but the moment it enters into the fintech space, that's where oversight falls away... So you don't have end-to-end protection of your transactions even if the bolted on feature of Venmo, ApplePay or whoever is positioned as a feature in an e2e solution.

I'm an old schooler, and I still tend to use FEDWIRE or SWIFT for any movements of large amounts of money, but younger generations aren't going to intuitively be aware of these boundaries.

 

[Radin.Y]

Yet. Apple is not in that business yet. Or that we know of.

But Apple is expanding more and more into the ad world.

Apple Further Expanding Into Ads, Now Directly Selling Ads in News App

Apple has started directly selling ads shown in the Apple News app, according to Axios. The report said that Apple News publishers will receive a...

www.macrumors.com

Next thing you know, we'll starting seeing ads in the Wallet app. It wouldn't surprise me one bit if it were to happen.

Maybe add for the promotions they run? “Get 5% cashback until end of the month if you buy ……..”
Shivers!

 

[neotint]

Great to hear! As history has shown unregulated banks and markets always become corrupt. We need this to have stable, trustworthy markets.

 

[davide_eu]

PayPal is so terrible. I legit only use them for paying through apps like DoorDash.

I can’t believe it’s still widely used

Sorry, I couldn't live without it.

Easy to pay, to send small amount of money... Why is so terrible for you?