CFPB examines Big Tech’s role in mobile payment systems ahead of rulemaking

Big organizations are able to act as “mini-governments” and enforce their own rules on payment infrastructure, Rohit Chopra, director of the United States Consumer Financial Protection Bureau (CFPB), stated at a fintech conference hosted by the Philadelphia Federal Reserve Bank on Sept. 7. As Big Tech continues to innovate, small firms might be squeezed out of the space, he added.The rapid advancement of consumer payment systems, particularly point-of-sale (POS) systems, has received little regulatory attention, in contrast to crypto possessions, Chopra stated:” Big Tech business have crept into the payments community to deepen customer engagement on their platforms, harvest and potentially monetize transactions-related information, and exploit standard financial sector cost streams.” Apple and Google have come to be dominant in mobile payments, offering them an outsized influence on consumers access to mobile payment options. “Tap-to-pay” near-field interaction (NFC) technology, for example, is gaining users quickly but not spreading out as widely as might be expected based upon the method other apps have actually grown. Related: Nigerian main bank adds NFC upgrade to eNaira for contactless paymentsApples requirement that NFC payments made on Apple mobile phones be routed through Apple Pay is among the obstacles the technology faces. Chopra said:” While I concur that strong obstacles to the dominant Wall Street banks and card networks are important, there is genuine concern that the big innovation firms will have the ability to put up much more gates and toll booths that will avoid small companies from emerging and prospering.” In October, the CFPB will propose guidelines to give customers more rights over their personal financial information. Those rules will encourage open banking and payments by permitting customers to switch services more easily, the bureau ensured. Point-of-sale payment approaches compared. Source: CFPBChopras speech accompanied the release of a report by the bureau on mobile gadgets and POS systems that elaborated on Chopras point in more depth.New findings about impact of huge tech in mobile payments consisting of modifications observed due to pandemic shutdowns. @CFPB Director Chopra @philadelphiafed #FinTech ready to go deep! pic.twitter.com/YS0P2Y8Vne— Aaron Klein (@Aarondklein) September 7, 2023

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