Consumer Bureau Conducting Review of “Big Tech” Payment Systems

Move is First Step Toward Consumer Protection Measures

The Consumer Financial Protection Bureau (CFPB) announced today it is collecting information from Big Tech firms on their payment processing systems. The CFPB’s move comes as concerns arise over how companies like Apple, Google, and Facebook use consumer data.

“Big Tech companies are eagerly expanding their empires to gain greater control and insight into our spending habits,” said CFPB Director Rohit Chopra. “We have ordered them to produce information about their business plans and practices.”

The CFPB’s work is one of many efforts within the Federal Reserve System to make payments safer, faster, and more competitive. The initial orders were sent to Amazon, Apple, Facebook, Google, PayPal, and Square. The Bureau will also be studying the payment system practices of Chinese tech giants, including Alipay and WeChat Pay.

Families and businesses benefit from faster, cheaper, and more secure payment systems. As online commerce and electronic payments have become consumers’ normal expectation — especially during the pandemic — companies have developed new products and business models to meet this demand.

Bureau Says New Systems Create New Consumer Risks

Large technology firms such as Apple and Google have sought to integrate payments services into their operating systems. Person-to-person (P2P) payments platforms such as Venmo and CashApp have grown quickly, and speedy growth can present risks to families and businesses. Chinese giants Alipay and WeChat Pay are part of broader super apps that touch multiple parts of a consumer’s life and until recently were actively seeking to expand their presence in the US market.

The CFPB’s orders build on the efforts of the Federal Trade Commission’s work to shed light on the business practices of the largest technology companies in the world. The orders also seek to illuminate the range of these consumer payment products and their underlying business practices. Specifically, the orders will compel information on:

Data harvesting and monetization. Payment companies may be actively sharing payment data across product lines and with data brokers and other third parties. In some cases, Big Tech companies may be using this data for behavioral targeting…