US government steps up oversight of Apple Pay and rivals

AppleInsider

The US Consumer Financial Protection Bureau says it will apply rigorous oversight to Big Tech payment systems such as Apple Pay.

Apple Pay on an Apple Watch

The Consumer Financial Protection Bureau (CFPB) recently fined Apple and Goldman Sachs a $90 million penalty over disputed Apple Card payments. However, it has long argued that digital wallet systems such as Apple Pay should be regulated like credit cards and banks are.

According to Reuters, the CFPB has now said it will step up its supervision of Big Tech companies. While CFPB did not name companies, it outlined plans for its oversight of payment apps and platforms.

"Digital payments have gone from novelty to necessity and our oversight must reflect this reality," CFPB Director Rohit Chopra announced. "The rule will help to protect consumer privacy, guard against fraud, and prevent illegal account closures."

The rule Chopra refers to is a threshold where technology firms whose digital wallets process more than 13 billion financial transactions annually, will be subject to the new oversight. The rule means that Apple Pay is included, as are others such as Google Pay, and Venmo.

Apple has not yet responded to this announcement in the US, but the new rule is similar to one it has previously objected to in Australia.

"Apple believes the proposed expansion... will increase regulatory burden without aa net public benefit, give rise to... regulatory error," Apple said in October 2023, "and stifle the dynamic innovation that has characterised Australia's payment system over recent years."

The CFPB did run a consultation process where firms such as Apple could present their arguments, and that process was originally due to conclude in early 2024. It's not clear whether that was extended, or what the timetable for implementing the rule is now.

It is possible that the new oversight rule may never come into force, however, because of the new Trump administration. Previously, the administration has accused the CFPB of overreach, and so it may yet block the move.



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Cesar Battistini Maziero

Just today I was setting up a meal card on an Android. The card is not compatible with Google wallet or samsung pay.
The meal card company makes you use their own app that is slow and clunky. And only supports. their card. 

On my iPhone, the same card was just a click on a button called add to wallet.

They are going to force the iPhone to become a mess just like Android.

bloggerblog

I had never felt so protected from late or missed payments as when using ApplePay, even my bank tries to sneak in a dollar here or there. ApplePay is my preferred payment method by far. The US Consumer Financial "Protection" Bureau is just another financial arm that wants to feel legit and cash grab like the EU.
Who do you think pays the $90M? Us the consumers of course!

Xed

bloggerblog said:

I had never felt so protected from late or missed payments as when using ApplePay, even my bank tries to sneak in a dollar here or there. ApplePay is my preferred payment method by far. The US Consumer Financial "Protection" Bureau is just another financial arm that wants to feel legit and cash grab like the EU.
Who do you think pays the $90M? Us the consumers of course!

Not only do I prefer Apple Pay when it's available, but since getting the Apple Card it's increasingly become my primary card everywhere Apple Pay is available. (save for a few specific types of usage where I get more than 2% to use a different card, like travel and fuel).

Additionally, I use Apple Cash as a middle man for moving cash between accounts without having those accounts directly connected and of course to send most people money. While I do wish there was a way to send money to Android users that was akin to Venmo , I don't want it to hinder Apple Cash in any way.

mpantone

Xed said:

bloggerblog said:

I had never felt so protected from late or missed payments as when using ApplePay, even my bank tries to sneak in a dollar here or there. ApplePay is my preferred payment method by far. The US Consumer Financial "Protection" Bureau is just another financial arm that wants to feel legit and cash grab like the EU.
Who do you think pays the $90M? Us the consumers of course!

Not only do I prefer Apple Pay when it's available, but since getting the Apple Card it's increasingly become my primary card everywhere Apple Pay is available. (save for a few specific types of usage where I get more than 2% to use a different card, like travel and fuel).

Additionally, I use Apple Cash as a middle man for moving cash between accounts without having those accounts directly connected and of course to send most people money. While I do wish there was a way to send money to Android users that was akin to Venmo , I don't want it to hinder Apple Cash in any way.

Well, enjoy your Apple Card now because Goldman Sucks is exiting the consumer banking industry which includes ditching Apple Card. Whether or not Apple can find another issuing bank to take over remains to be seen but there is almost zero chance that if a financial institution agrees to pick up Apple Card, they will not acquiesce to all of Apple's conditions. You will get fewer conveniences and benefits from whoever is the next issuing bank of Apple Card.

Xed

I'm glad for better regulation in this area. I never felt an issue with Apple Pay, but other services have been sketchy. Plus, if this leads Apple into creating a proper financial institution offshoot that can then service it's own credit card and other financial services that sounds like a win for consumers.

Xed

mpantone said:

Xed said:

bloggerblog said:

I had never felt so protected from late or missed payments as when using ApplePay, even my bank tries to sneak in a dollar here or there. ApplePay is my preferred payment method by far. The US Consumer Financial "Protection" Bureau is just another financial arm that wants to feel legit and cash grab like the EU.
Who do you think pays the $90M? Us the consumers of course!

Not only do I prefer Apple Pay when it's available, but since getting the Apple Card it's increasingly become my primary card everywhere Apple Pay is available. (save for a few specific types of usage where I get more than 2% to use a different card, like travel and fuel).

Additionally, I use Apple Cash as a middle man for moving cash between accounts without having those accounts directly connected and of course to send most people money. While I do wish there was a way to send money to Android users that was akin to Venmo , I don't want it to hinder Apple Cash in any way.

Well, enjoy your Apple Card now because Goldman Sucks is exiting the consumer banking industry which includes ditching Apple Card. Whether or not Apple can find another issuing bank to take over remains to be seen but there is almost zero chance that if a financial institution agrees to pick up Apple Card, they will not acquiesce to all of Apple's conditions. You will get fewer conveniences and benefits from whoever is the next issuing bank of Apple Card.

Maybe, maybe not. The only thing that I would like to change is how the Apple Card issues closes the month, issues statements, reports to credit bureaus, and requires payments for all users on the same day. That's an overwhelming task that doesn't scale well. Plus, with the end of the month being a high cost time for more people being able to having the payment be due at a different part of the the month's cycle would simply be an added advantage.

mike1

Xed said:

mpantone said:

Xed said:

bloggerblog said:

I had never felt so protected from late or missed payments as when using ApplePay, even my bank tries to sneak in a dollar here or there. ApplePay is my preferred payment method by far. The US Consumer Financial "Protection" Bureau is just another financial arm that wants to feel legit and cash grab like the EU.
Who do you think pays the $90M? Us the consumers of course!

Not only do I prefer Apple Pay when it's available, but since getting the Apple Card it's increasingly become my primary card everywhere Apple Pay is available. (save for a few specific types of usage where I get more than 2% to use a different card, like travel and fuel).

Additionally, I use Apple Cash as a middle man for moving cash between accounts without having those accounts directly connected and of course to send most people money. While I do wish there was a way to send money to Android users that was akin to Venmo , I don't want it to hinder Apple Cash in any way.

Well, enjoy your Apple Card now because Goldman Sucks is exiting the consumer banking industry which includes ditching Apple Card. Whether or not Apple can find another issuing bank to take over remains to be seen but there is almost zero chance that if a financial institution agrees to pick up Apple Card, they will not acquiesce to all of Apple's conditions. You will get fewer conveniences and benefits from whoever is the next issuing bank of Apple Card.

Maybe, maybe not. The only thing that I would like to change is how the Apple Card issues closes the month, issues statements, reports to credit bureaus, and requires payments for all users on the same day. That's an overwhelming task that doesn't scale well. Plus, with the end of the month being a high cost time for more people being able to having the payment be due at a different part of the the month's cycle would simply be an added advantage.

I much prefer the end of month due date. Easy, consistent and predictable. Provides up to 60 days before I need to pay the bill. Wish all my cards were like that.

jdw

The problem here is not that Apple Pay needs more regulation (inefficient red tape imposed by Big Brother).  Rather, there need to be more US retailers who still don't accept Apple Pay to start accepting it.  

None of this talk matters at this stage anyway based on what the article itself says at the end:

"It is possible that the new oversight rule may never come into force"

May it never!

Xed

mike1 said:

Xed said:

mpantone said:

Xed said:

bloggerblog said:

I had never felt so protected from late or missed payments as when using ApplePay, even my bank tries to sneak in a dollar here or there. ApplePay is my preferred payment method by far. The US Consumer Financial "Protection" Bureau is just another financial arm that wants to feel legit and cash grab like the EU.
Who do you think pays the $90M? Us the consumers of course!

Not only do I prefer Apple Pay when it's available, but since getting the Apple Card it's increasingly become my primary card everywhere Apple Pay is available. (save for a few specific types of usage where I get more than 2% to use a different card, like travel and fuel).

Additionally, I use Apple Cash as a middle man for moving cash between accounts without having those accounts directly connected and of course to send most people money. While I do wish there was a way to send money to Android users that was akin to Venmo , I don't want it to hinder Apple Cash in any way.

Well, enjoy your Apple Card now because Goldman Sucks is exiting the consumer banking industry which includes ditching Apple Card. Whether or not Apple can find another issuing bank to take over remains to be seen but there is almost zero chance that if a financial institution agrees to pick up Apple Card, they will not acquiesce to all of Apple's conditions. You will get fewer conveniences and benefits from whoever is the next issuing bank of Apple Card.

Maybe, maybe not. The only thing that I would like to change is how the Apple Card issues closes the month, issues statements, reports to credit bureaus, and requires payments for all users on the same day. That's an overwhelming task that doesn't scale well. Plus, with the end of the month being a high cost time for more people being able to having the payment be due at a different part of the the month's cycle would simply be an added advantage.

I much prefer the end of month due date. Easy, consistent and predictable. Provides up to 60 days before I need to pay the bill. Wish all my cards were like that.

All my cards are up to 60 days from the time a purchase is made to the time I need to pay my bill, because the due date is based on when the monthly cycle ends. You get 30 days to pay after the cycle ends.

coolfactor

In other words, they are saying "we need to figure out how to get a piece of this pie!"

StrangeDays

mpantone said:

Xed said:

bloggerblog said:

I had never felt so protected from late or missed payments as when using ApplePay, even my bank tries to sneak in a dollar here or there. ApplePay is my preferred payment method by far. The US Consumer Financial "Protection" Bureau is just another financial arm that wants to feel legit and cash grab like the EU.
Who do you think pays the $90M? Us the consumers of course!

Not only do I prefer Apple Pay when it's available, but since getting the Apple Card it's increasingly become my primary card everywhere Apple Pay is available. (save for a few specific types of usage where I get more than 2% to use a different card, like travel and fuel).

Additionally, I use Apple Cash as a middle man for moving cash between accounts without having those accounts directly connected and of course to send most people money. While I do wish there was a way to send money to Android users that was akin to Venmo , I don't want it to hinder Apple Cash in any way.

Well, enjoy your Apple Card now because Goldman Sucks is exiting the consumer banking industry which includes ditching Apple Card. Whether or not Apple can find another issuing bank to take over remains to be seen but there is almost zero chance that if a financial institution agrees to pick up Apple Card, they will not acquiesce to all of Apple's conditions. You will get fewer conveniences and benefits from whoever is the next issuing bank of Apple Card.

I doubt the 2% will go away, or the app. Main two features. 

Bel.Air

In my mind one of the (many) reasons for Apple's lasting growth and success especially in the services area is how they leveraged having hundreds of millions of credit cards on file (Jobs would specifically mention this in keynotes) when the iTunes Store was smashing new records, way before the iPhone. This paved the way to the (profitable) App Store by bringing micropayments into the mainstream.

But guess what? All of this was supported by a preexisting, highly regulated yet successful financial payments system. It never really bothered anyone and actually helped Apple thrive (and yes innovate) in a safe an reliable environment. To all the naysayers, I'd suggest looking up the fail rates in the payments industry (like the Visa network). It goes for decades without any serious outages. And it's still one of the most heavily regulated and scrutinised industries...

But I guess people have been hearing stories about how "big government" is taking and wasting their money for so long that they've been lead to believe the market stability we've been enjoying since the better part of a century has nothing to do with regulations (it absolutely does) and we may as well do away with them.

swat671

My question is, why regulate Apple Pay like a bank? You can only connect it to existing credit and debit cards and bank accounts that are already regulated. Isn’t that like double regulation? I’m all for keeping people safe from unscrupulous corporations, but I don’t think Apple’s that sort of company. 

Xed

swat671 said:

My question is, why regulate Apple Pay like a bank? You can only connect it to existing credit and debit cards and bank accounts that are already regulated. Isn’t that like double regulation? I’m all for keeping people safe from unscrupulous corporations, but I don’t think Apple’s that sort of company. 

This isn't about Apple Pay specifically, but these kind of middle-man services within the tech industry. Venmo, PayPal, Zelle, Stripe, Square, and countless others would be subjected to more scrutiny. Personally, I won't touch most of them because they have some unscrupulous business practices that don't protect the user.