The Computer & Communications Industry Association (CCIA), a lobby group representing companies such as Apple, Google, Amazon, Meta (formerly Facebook), and X (formerly Twitter), criticised a plan by a US watchdog to oversee digital wallet and payment app providers.
The US Consumer Financial Protection Bureau (CFPB) had proposed in November to subject tech giants offering smartphone payments and wallets to the same level of supervision as banks. This move, according to the CCIA, could stifle innovation and limit market access for some players.
The CCIA argued that the CFPB's proposal, yet to be finalized, might be counterproductive, suggesting that overly burdensome digital regulation could impede the growth of new startups in the industry.
While some representatives from the banking industry welcomed the proposal, stating that companies providing bank-like services should face similar regulations as banks, Krisztian Katona, CCIA's head of regulatory policy, expressed concerns in a Reuters-reviewed statement.
The CCIA's'somment letter, also reviewed by Reuters and to be submitted to the CFPB, contended that the proposal failed to identify specific risks to consumers and wrongly perceived non-bank digital providers and banks as direct competitors.
The letter emphasised that, despite some competition, there were more instances in the market where the collaboration between banks and nonbank entities benefited consumers through complementary services.
The Financial Technology Association, in a separate comment letter released on the same day, echoed similar concerns. This association represents companies like PayPal (owner of Venmo) and Block Inc. (operator of the Cash App).
Both lobby groups highlighted the potential negative consequences of the CFPB's proposal on the digital payment industry, emphasising the importance of carefully considering the impact on innovation and market dynamics.
