Apple Pay's widespread use has pushed it into the regulatory scope of the US Consumer Financial Protection Bureau. This is a first for the country since the bureau, traditionally focused on financial institutions, is now touching mobile wallet services.
Beginning next month, the CFPB will be inspecting Apple's mobile wallet services for compliance with federal financial rules on fairness, transparency, and consumer protection.
What Does the CFPB Do?
The CFPB enforces federal consumer financial laws while ensuring that products are competitive, fair, and transparent. Until recently, the agency's involvement with digital wallets was limited to basic compliance checks, 9to5Mac reports. Last year, however, the bureau proposed that these services be treated like banks as a way to better address consumer complaints and enforce equitable practices.
This finalized regulation will make any company processing more than 50 million US-dollar transactions annually, such as Apple, subject to the same level of scrutiny as financial institutions.
How Will the CFPB Regulation Affect Apple Pay
On top of over 60% of Americans using mobile wallets, Apple Pay remains the number one choice. Through tighter oversight, the CFPB looks to protect millions of transactions while ensuring fair and square practices on all sides. This regulation may even force more accountability in tech firms running payment platform services.
Apple Proactive to Regulation
Historically, Apple has resisted changing its ways until pressure from external forces made it necessary to do so.
In an unprecedented move, Apple preemptively opened its NFC payment chip to banks and payment companies across the globe, Bloomberg writes. This likely comes in response to similar regulatory pressures building in the European Union that indicate Apple is trying to adapt before mandatory enforcement arrives in the US.
What This Means to Mobile Wallet Users
CFPB's oversight brings an added layer of consumer protection to the use of Apple Pay and similar payment services. Consumers would be more provided with transparent knowledge, quicker resolution to complaints, and fairer access to services.
For the Cupertino tech giant, compliance might actually help align operational policies with federal standards to ensure easier usability while competing relatively.
"Digital payments have gone from novelty to necessity and our oversight must reflect this reality," CFPB Director Rohit Chopra said in the statement.
The CFPB's regulation of Apple Pay could spell that there will be a total shift in digital payment systems. Well, this policy will put these platforms under stricter scrutiny to be held at a higher standard for benefit, leading to increased consumer trust.
Apple takes an example in proactive compliance, and several tech giants may follow this trend in enhancing compliance to promote consumer welfare.
It's very likely that CFPB will follow in the footsteps of the European Union when it comes to NFC payment chip access. But, Apple is one step ahead of the ruling since it first implemented this globally before the EU made a move to limit it.
Regarding Apple Pay, here's how to use this digital wallet for contactless payment in case you haven't tried it before.
