The Consumer Financial Protection Bureau (CFPB) has highlighted the growing influence of platforms like Apple Pay and PayPal in the payments industry as Big Tech continues to blur the lines between traditional banking and commercial activities.

Despite their significant market presence, these nonbank operators have not been subjected to the same regulatory scrutiny as banks and credit unions. The CFPB's new rule aims to close this oversight gap, ensuring that major nonbank players adhere to federal laws just as traditional financial institutions do.

Initially proposed to cover services processing over five million transactions annually, the rule's threshold was raised to 50 million, targeting seven key providers: Apple, Google, Amazon, PayPal, Venmo, Block, and Zelle. According to CFPB Director Rohit Chopra, this regulation acknowledges the growing necessity of digital payments and aims to protect consumer privacy, prevent fraud, and curb unauthorized account closures. The rule will take effect 30 days after its publication in the Federal Register, granting the CFPB authority to supervise these entities in areas such as privacy, fraud prevention, and account management practices.

However, the rule has drawn criticism from industry stakeholders, including Financial Technology Association CEO Penny Lee, who argues that the regulation is "deeply flawed" and lacks clarity on the issues it seeks to address. Lee warns that the rule could stifle competition, reduce available services, and increase costs for consumers, urging the CFPB to reconsider its approach. Despite the pushback, the regulation marks a significant step in aligning Big Tech's payment operations with broader financial oversight standards.