CFPB examines Big Tech’s role in mobile payment systems ahead of rulemaking
Big businesses are able to act as “mini-governments” and impose their own rules on payment infrastructure, Rohit Chopra, director of the United States Consumer Financial Protection Bureau (CFPB), said at a fintech conference hosted by the Philadelphia Federal Reserve Bank on Sept. 7. As Big Tech continues to innovate, small firms may be squeezed out of the space, he added.
The rapid development of consumer payment systems, particularly point-of-sale (POS) systems, has received little regulatory attention, in contrast to crypto assets, Chopra said:
“Big Tech companies have crept into the payments ecosystem to deepen consumer engagement on their platforms, harvest and potentially monetize transactions-related data, and exploit traditional financial sector fee streams.”
Apple and Google have come to be dominant in mobile payments, giving them an outsized impact on consumers’ access to mobile payment solutions. “Tap-to-pay” near-field communication (NFC) technology, for example, is gaining users rapidly but not spreading as widely as might be expected based on the way other apps have grown.
Related: Nigerian central bank adds NFC upgrade to eNaira for contactless payments
Apple’s requirement that NFC payments made on Apple mobile devices be routed through Apple Pay is one of the hindrances the technology faces. Chopra said:
“While I agree that strong challenges to the dominant Wall Street banks and card networks are important, there is real concern that the large technology firms will be able to erect even more gates and toll booths that will prevent small firms from emerging and succeeding.”
In October, the CFPB will propose rules to give consumers more rights over their personal financial data. Those rules will encourage open banking and payments by allowing consumers to switch services more easily, the bureau assured.
Chopra’s speech coincided with the release of a report by the bureau on mobile devices and POS systems that elaborated on Chopra’s point in more depth.
New findings about impact of big tech in mobile payments including changes observed due to pandemic shutdowns. @CFPB Director Chopra @philadelphiafed #FinTech about to go deep! pic.twitter.com/YS0P2Y8Vne
— Aaron Klein (@Aarondklein) September 7, 2023
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Sir Keir Starmer continues to face the threat of a major rebellion during a key vote on welfare reforms later – despite making last-minute concessions to disgruntled Labour MPs.
Work and Pensions Secretary Liz Kendall has confirmed that all existing claimants of the personal independence payment (PIP), the main disability benefit, will be protected from changes to eligibility.
The combined value of the standard Universal Credit allowance and the health top-up will rise “at least in line with inflation” every year of this parliament.
And an additional £300m for employment support for sick and disabled people in 2026 has been announced, which will rise every year after.
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Welfare cuts ‘needed to be made’
Ms Kendall has also promised that a consultation into PIP – “co-produced” with disabled people – will be published next autumn.
She said the U-turn on welfare cuts will cost taxpayers about £2.5bn by 2030 – less than half the £4.8bn the government had expected to save with its initial proposals.
Modelling by Ms Kendall’s own department, released yesterday, suggested the proposals would push 150,000 more people into poverty by 2030, down from the 250,000 estimated under the original plan.
But after announcing the U-turns, Labour MPs were still publicly saying they could not back the plans as they do not go far enough to allay their concerns.
Disabilities minister Stephen Timms would not say he was “confident” the proposals would pass the Commons when asked on Sky News’ Politics Hub with Sophy Ridge.
“We’ve got a very strong package, I certainly hope it passes,” he replied.
Read more: What are the concessions to the welfare reform bill?
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‘Disabled people thrown under the bus’
A total of 86 charities united yesterday to call on MPs to reject the reforms, saying they will harm disabled people and calling it “a political choice”.
The likes of Oxfam, Child Action Poverty Group, Mind and Shelter said the bill has been brought to a vote without consulting disabled people and without any assessment “of its impact on health and employment outcomes”.
When asked to name “a single” disability organisation in favour of the reforms, Ms Kendall declined to do so.
Several Labour MPs indicated they would still vote against the changes, leaving the government in the dark over how big a rebellion it still may face.
Ms Kendall tried to allay their fears, telling MPs: “I believe we have a fair package, a package that protects existing claimants because they’ve come to rely on that support.”
Richard Burgon presented a petition to parliament yesterday evening against the cuts, signed by more than 77,000 people.
Several Labour MPs questioned why the vote was going ahead before the review into PIP is published – including Rachael Maskell, who said she could not “countenance sick and disabled people being denied support” and added: “It is a matter of conscience.”
Connor Naismith said the concessions “undoubtedly improve efforts to secure welfare reform which is fair”, but added: “Unfortunately, I do not believe these concessions yet go far enough.”
Labour rebel Nadia Whittome said the government was ‘ignoring’ disabled people
Nadia Whittome accused the government of “ignoring” disabled people and urged ministers to go “back to the drawing board”.
Ian Byrne told the Commons he will vote against the “cruel cuts” to disability benefits because the “so-called concessions go nowhere near far enough”.
The vote will take place this evening, with coverage on Sky News’ Politics Hub live blog and on TV.
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