Major digital payment providers will soon be subject to bank-like supervision from the US Consumer Financial Protection Bureau (CFPB). On Thursday, the CFPB issued a final rule that will regulate digital payment apps that process over 50 million transactions each year, covering services like Apple Pay, Google Wallet, PayPal, Cash App, and others.
The new rule is meant to ensure digital payment providers adhere to the same laws as credit unions and large banks. It will give the CFPB the authority to oversee their compliance with federal laws surrounding privacy, fraud, and other rules through “proactive examinations.” This follows the CFPB’s initial proposal to regulate digital payment providers last year, which would’ve covered a wider swath of companies processing more than 5 million transactions a year.
Now, the CFPB estimates that the most popular apps included under the rule cumulatively handle more than 13 billion transactions per year. “Digital payments have gone from novelty to necessity and our oversight must reflect this reality,” CFPB Director Rohit Chopra said in the announcement. “The rule will help to protect consumer privacy, guard against fraud, and prevent illegal account closures.”
The rule is set to go into effect 30 days after it’s published in the Federal Register.