CFPB Says Big Tech Firms Discourage Competition on Point-of-Sale Payments

The CFPB asserted that restrictions imposed by "dominant operating systems" on point-of-sale ("POS") payment methods may have an "outsized effect" and hurt the development of a "truly open ecosystem."

In an analysis on "Big Tech's Role in Contactless Payments," the CFPB said that tech companies are playing a "powerful role in determining consumers' payment options." The report reviewed the evolution of payments in POS purchases and the role that mobile device operating systems play. The CFPB focused on the role of the two "dominant operating systems—Apple's iOS operating system and Google's Android operating system" and their "outsized effect" on "access to payments systems" and "the development of a truly open ecosystem." The CFPB raised concerns about how proprietary restrictions will hurt the development of the ecosystem (e.g., that Apple only allows the use of its proprietary payment service Apple Pay on users' mobile devices).

Statement

At the Federal Reserve Bank of Philadelphia Annual Fintech Conference, CFPB Director Rohit Chopra stated that the CFPB will be "proposing rules to activate a dormant authority authorized by Congress in 2010 that will give consumers more personal financial data rights." He said that the rule would provide consumers more personal financial data rights in order to "intensify competition across financial products by allowing consumers to securely permission their transaction data and switch more easily." He contended that the current financial market structure is full of large firms "acting as mini-governments" that ultimately reduce payment options.