The Consumer Financial Protection Bureau (CFPB) has demanded that big tech, including Fintechs, to hand over information on payments.
As everyone knows, payments have gone digital as cash usage declines. While many transactions have migrated to plastic debit and credit cards, today cards are virtual and payments are made using a plethora of services frequently via digital wallets.
The CFPB states that a series of orders have been issued to “collect information on the business practices of large technology companies operating payments systems in the United States.” Ostensibly, this investigation is designed to better understand how firms are managing data and personal information.
CFPB Director Rohit Chopra, said:
“Big Tech companies are eagerly expanding their empires to gain greater control and insight into our spending habits. We have ordered them to produce information about their business plans and practices.”
The CFPB notes that it has the statutory authority to order participants in the payments market to turn over information to help the Bureau monitor for risks to consumers and to publish aggregated findings that are in the public interest.
While the initial orders were sent to Amazon, Apple, Facebook, Google, PayPal, and Square the CFPB said it was also studying the payment system practices of Chinese tech giants, including Alipay and WeChat Pay.
The CFPB claimed that payment changes “present new risks to consumers and to a fair, transparent, and competitive marketplace.”
The CFPB cited Apple and Google as examples.
The Bureau also said that person-to-person (P2P) payments platforms such as Venmo and CashApp have grown quickly, and speedy growth can present risks to families and businesses.
The CFPB said that when payment systems gain scale and network effects, merchants and other partners feel obligated to participate, and the risk increases that payment systems operators will limit consumer choice and stifle innovation by anticompetitively excluding certain businesses.
The letter issued by the Director is available below.