Washington, D.C. — In response to a new rule proposed by the Consumer Financial Protection Bureau (CFPB) that would subject digital payment apps to more regulatory scrutiny, the American Economic Liberties Project released the following statement.

“With Americans increasingly reliant on digital wallet apps for payments, purchases, and transfers, CFPB oversight won’t just protect consumers – it will protect markets and fair competition. This rule will help the CFPB ensure that Apple, Google, and non-bank financial firms are held to the same standards for digital payments that banks and credit unions are,” said Shahid Naeem, Senior Policy Analyst at the American Economic Liberties Project. “Our financial firms and tech companies should be competing on the merits, not through regulatory arbitrage.”

The new rule would cover large digital payment platforms, which, through the rise of apps like Venmo and Cash App, have become the most popular method through which Americans send each other money. The rule would also bring digital wallet offerings from Apple and Google, which have until now have gone unsupervised, under CFPB supervision. While the CFPB already has enforcement authority over many of these applications, bringing them under the agency’s supervisory authority will better enable the agency to monitor risk, protect essential financial infrastructure, and ensure that firms compete fairly and don’t abuse consumers.

Crucially, the rulemaking also levels the playing field between large non-bank firms involved in the financial industry (like Apple, Google, PayPal, and others) and banks, whose longstanding presence in consumer digital payments is more closely supervised. The rulemaking has already been met with support from the banking industry.

The rule follows a CFPB report examining Apple and Google’s control of mobile payment systems that foreshadowed a tougher stance on Big Tech’s role in consumer finance, as well as a recent class-action lawsuit filed against Venmo owner PayPal alleging the firm’s payment platforms charge excessively high transaction fees and use “anti-steering” tactics to prevent price competition from rivals.

Learn more about Economic Liberties here.

###

The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.