Apple Gets Warning From Top US Consumer Watchdog on Tap to Pay

tech.hindustantimes.com:

The US government's top consumer watchdog, which is in the process of writing rules around the sharing of consumer financial data, warned tech giants about being overly restrictive in access to payments apps, taking a shot at Apple Inc.'s proprietary tap-to-pay technology.

Because Apple and Alphabet Inc.'s Google Pay dominate the mobile-device tap-to-pay market, the constraints they impose on app developers' ability to use the technology could inhibit consumer choice, the Consumer Financial Protection Bureau said. Apple requires iOS device users to turn to Apple Pay for tap-to-pay transactions, barring direct integration with apps such as Venmo, while Google's Android operating system does not, but the concern is that Google “could reverse this position in the future,” the bureau said.

“The CFPB will continue to work with these entities and take appropriate steps to ensure that Big Tech companies do not impede the development of open ecosystems for digital payments,” the agency said in a report published Thursday.

Tap-to-pay transactions have exploded in recent years as mobile devices became ever-present, making paying via a smartphone more and more desirable. Almost 56 million consumers used Apple Pay for an in-store payment in April 2023 alone, the CFPB estimated.

In coming months, the bureau is preparing to release regulations on open banking, which would essentially dictate how financial firms share consumer data. Large technology companies such as Apple and Google impact whether consumers can make payments using third-party apps, said Rohit Chopra, the agency's director.

“We are carefully evaluating Big Tech's role in our banking and payments system,” Chopra said in a statement announcing the report. Almost two years