Consumer Finance Watchdog Raises Concerns Over Big Tech's Growing Control in Payment Infrastructure
Summary:
Rohit Chopra, the chair of the Consumer Financial Protection Bureau, warns that big businesses are exerting their influence in the payment infrastructure, potentially squeezing out smaller firms. Chopra expresses concern over the dominance of Big Tech companies like Apple and Google in mobile payments and their ability to control access to payment solutions. He calls for regulations to empower consumers, allow for easier switching of services, and promote open banking. These remarks coincide with the release of a report by the bureau highlighting the impact of big tech in mobile payments.
Large corporations have assumed the role of "mini-governments" in the payment infrastructure, according to Rohit Chopra, the chair of the Consumer Financial Protection Bureau (CFPB) in the United States. Speaking at a fintech conference hosted by the Philadelphia Federal Reserve Bank, Chopra expressed concerns that small businesses may be squeezed out of the industry as Big Tech continues to innovate. While regulatory attention has focused on crypto assets, the rapid growth of consumer payment systems, particularly point-of-sale (POS) systems, has been overlooked, Chopra added. Big Tech companies have entered the payments ecosystem to enhance consumer engagement, collect transaction data, and exploit traditional financial sector fees. Apple and Google, in particular, have emerged as dominant players in mobile payments, affecting consumers' access to alternative solutions. Chopra also criticized Apple for requiring NFC payments on its devices to go through Apple Pay, limiting the reach of the technology. He emphasized the need to challenge Wall Street banks but expressed concerns that large technology firms could further hinder the emergence and success of smaller firms. The CFPB is set to propose rules in October to provide consumers with more control over their financial data and encourage open banking and payments. The release of a report by the bureau coincided with Chopra's speech, which delved deeper into the impact of big tech on mobile payments and point-of-sale systems.
Published At
9/7/2023 7:11:34 PM
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