The US Consumer Financial Protection Bureau (CFPB) has issued a final rule to supervise Silicon Valley tech giants and others processing more than 13 billion financial transactions annually through digital wallets and payment apps, Reuters reported.
The new regulation is aimed at providing oversight similar to that of banks, to ensure consumer data privacy breach and fraud prevention, the US watchdog noted.
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The rule will bring services such as Apple Wallet, Google Pay, and Venmo under scrutiny.
Initially proposed a year ago, the regulations come as US President-elect Donald Trump prepares for potential changes to federal regulators’ conduct, which may affect the rule’s future.
The news agency quoted CFPB director Rohit Chopra as saying: “Digital payments have gone from novelty to necessity and our oversight must reflect this reality.”
The rule is expected to apply to seven unnamed nonbank firms, accounting for 98% of market activity.
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By GlobalDataRegulatory supervision will involve detailed scrutiny to ensure compliance with federal law, a process banks routinely undergo.
Some bank industry representatives support this move, arguing that providers of bank-like services should be regulated similarly.
However, the Financial Technology Association, representing members such as Amazon Pay, PayPal, and Intuit, urged the CFPB to withdraw the rule, stating it addresses no clearly identified problem.
Significant changes have been made to the final rule since its initial proposal.
Companies must now process at least 50 million transactions annually to be covered, up from the originally proposed 5 million.
Additionally, the rule will only apply to transactions in US dollars, excluding digital assets with monetary value.
The rule will take effect 30 days after its publication in the Federal Register, the official journal for government regulations, the media outlet reported.
