Digital payment services and e-wallets are about to be monitored similarly to banks in the US.

The Consumer Financial Protection Bureau (CFPB) proposal would subject companies like Alphabet (Google), Apple, PayPal and CashApp to bank-like oversight over privacy protections, executive compliance with unfair and deceptive practices.

Companies like PayPal would be subject to similar regulation as the banking sector.

Reuters quoted a CFPB official as saying that if finalized, the proposal would regulate the operations of 17 companies with a total payment liquidity of $13 billion per year.

Since 2021, the CFPB has been cracking down on tech companies for failing to comply with privacy and competition laws. Last year, the agency launched an investigation into how payment platforms use user data.

In a statement on November 7, CFPB Director Rohit Chopra said that the technology sector has expanded into the financial services sector of the heavily regulated banking industry. “The new rule aims to prevent price gouging by ensuring that non-bank technology companies and payment platforms are under appropriate supervision.”

The CFPB also said that Big Tech has collected large amounts of user payment data, but has not ensured transparency, confusing policies that make it difficult for customers, but still makes money from that data. The new proposal is said to apply to companies with more than 5 million transactions per year.

In a statement, the Consumer Bankers Association called the proposal “a step in the right direction.” Meanwhile, the Electronic Transactions Association, which represents banks, fintechs and large tech companies, said in a statement that it wanted to “ensure this proposal achieves its goals of protecting consumers and applying public policy consistently to all players.”

The new proposal will be considered in a process that ends in early 2024.

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