US Watchdog Issues Final Rule to Supervise Big Tech Payments, Digital Wallets

Silicon Valley tech giants and ors who toger process more than 13 billion financial transactions annually through digital wallets and payment apps will be subject to government supervision, US Consumer Financial Protection Bureau said.

new rule finalised on Thursday will bring a burgeoning consumer service under same scrutiny faced by banks while helping protect privacy of vast amounts of consumer data and preventing fraud and illegal closure of ir accounts, agency said.

regulations, first proposed a year ago to govern digital services such as Apple Wallet, Google Pay and Venmo, come as President-elect Donald Trump prepares to make far-reaching changes to federal regulators' conduct when he takes office next year, which could cast doubt on rule's future.

"Digital payments have gone from novelty to necessity and our oversight must reflect this reality," CFPB Director Rohit Chopra said in a statement.

Regulators' supervision entails detailed internal scrutiny to ensure companies' legal compliance with federal law, something banks routinely face.

While some bank industry representatives h welcomed move, saying providers of bank-like services should be regulated like banks, Big Tech and some financial tech companies were not happy, claiming regulations would stifle innovation and squeeze startups out of business.

CFPB said final rule contained significant changes from initial proposal. A company will now need to process at least 50 million transactions a year to be covered by rule, not 5 million as originally proposed.

rule will now apply only to transactions in US dollars, whereas agency h initially said it could apply to digital assets that have monetary value and can be used to make purchases.

rule will take effect 30 days after publication in Federal Register, official journal for government regulations.