Venmo, Apple Pay and Other Payment Apps Will Become More Regulated
The US Consumer Financial Protection Bureau (CFPB) is expanding its regulatory scope beyond traditional banks to include popular payment apps such as Apple Pay , Google Pay and Venmo. By and large, this move by the CFPB is encouraging to anyone who is ( rightly ) concerned about privacy, fraud, and user rights in an increasingly digital financial landscape. But for now, here’s what the tightened rules mean for you and your Venmo notifications .
Why payment apps are becoming more regulated
The CFPB’s new rule targets companies that process more than 50 million transactions annually, giving the bureau authority to conduct proactive audits of these digital payment platforms. CFPB Director Rohit Chopra emphasized the importance of this oversight, saying , “Digital payments have gone from a novelty to a necessity, and our oversight must reflect that reality. This rule will help protect consumer privacy, protect against fraud, and prevent illegal account closures.”
The current rule is a refined version of a proposal first introduced in November 2023. Two notable changes include:
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Increasing the transaction threshold from 5 million to 50 million.
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Narrowing the scope to focus specifically on US dollar transactions.
This new rule is not all that surprising given the CFPB’s approach to digital finance in recent history. For example, the CFPB demonstrated its willingness to hold digital financial companies accountable back in October , when the bureau fined Apple and Goldman Sachs $89 million for misleading customers and failing to properly process disputed Apple Card transactions.
What does this mean to you?
Simply put, this is a good thing if, like me, you use payment apps on a daily basis. Payment wallet apps will now be required to comply with federal law, just like large banks, credit unions and other financial institutions already regulated by the CFPB. Such proactive oversight can prevent harm by identifying problems early rather than investigating fraud after the fact. The new rules promise several key consumer protections:
1. Extended confidentiality guarantees . Users will likely have more control over their personal data, with increased restrictions on how payment apps can collect, use and share their information. Companies will face greater scrutiny of their data protection practices.
2. Protection against arbitrary closure of accounts . The rule addresses “debanking,” the practice of closing user accounts without notice or explanation. This provides users with greater security and transparency in their digital financial relationships.
3. Reduce Fraud and Errors : The CFPB will provide direct oversight to quickly assess and address risks, including technical failures, that could potentially impact millions of consumers’ access to funds.
The new supervision will take effect 30 days after publication in the Federal Register.
As digital wallets and payment apps become an integral part of how Americans manage money, consumer protection becomes increasingly necessary. For consumers, the CFPB’s latest rule means more transparency, better protections, and greater control over their digital financial experiences. While companies may view these rules as complex, they ultimately create a more reliable and secure digital financial ecosystem. Greater control over big tech companies means more security for your digital wallet.