The Consumer Financial Protection Bureau (CFPB) has broadened its supervision of digital payment services, encompassing platforms such as Apple Pay, Cash App, and PayPal.

• The Consumer Financial Protection Bureau (CFPB) has released a final version of a rule that will enable it to supervise non-bank companies that provide financial services such as payments and wallet apps.
• Services from Apple, Google, and payment firms like PayPal and Block would also be included.
• According to the CFPB, over 13 billion consumer payments are processed annually by the most widely used apps.

The Consumer Financial Protection Bureau (CFPB) has released a final version of a rule that will enable it to supervise non-bank companies that provide financial services such as payments and wallet apps.

The CFPB announced that tech giants and payments firms with at least 50 million transactions annually will be subject to review to ensure compliance with the laws that banks and credit unions follow. This includes popular services from companies like PayPal and Venmo, as well as payment firms such as Stripe and Square.

The CFPB's new rule grants it greater authority over digital payment companies by treating them like banks. This includes subjecting the firms to "proactive examinations" to ensure legal compliance, allowing it to request records and interview employees.

"CFPB Director Rohit Chopra stated that digital payments have become a necessity and our oversight must reflect this reality. The rule will safeguard consumer privacy, prevent fraud, and prohibit illegal account closures."

The CFPB has expressed its intention to expand its supervision to tech and fintech companies that provide financial services but have avoided closer examination by collaborating with banks. Nowadays, many Americans rely on payment apps as their primary bank accounts, using their mobile phones to store money and make everyday transactions.

The CFPB stated on Thursday that the most widely used apps, which collectively handle over 13 billion consumer payments annually, have experienced "remarkable acceptance" among low- and middle-income users.

The regulator stated that what initially started as a convenient substitute for cash has transformed into a vital financial instrument, handling over a trillion dollars in transactions between consumers and their loved ones and businesses.

The CFPB initially proposed that companies processing at least 5 million transactions annually be subjected to the same examinations as banks and credit unions. However, the threshold was increased to 50 million transactions in the final rule, the agency announced on Thursday.

Payment apps that are exclusive to a specific retailer, such as , are not subject to the rule.

The new CFPB rule is one of the few instances where the U.S. banking industry publicly supported the regulator's actions; banks have long believed that tech firms making inroads in financial services should be more scrutinized.

The rule, when published in the Federal Register, will be implemented 30 days later, as stated by the CFPB.