- Developers with a stake in Apple’s regulations on contactless payments are encouraged to submit comments
- The CFPB will be finalizing rules to accelerate the shift to “open banking” in the U.S. next month
With Apple liberalizing access to third-party developers when it comes to near-field communications (NFC) in regards to mobile-wallet providers, a federal agency is seeking comment as it finalizes rules to accelerate the shift to ‘open banking’ in the U.S.
In a blog post, Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra encouraged developers and others with a stake in Apple’s regulations on contactless payments to contact the agency’s Office of Competition and Innovation.
This October, the CFPB will be finalizing rules to accelerate the shift to “open banking” in the U.S., which would enable consumers to switch to competitors with better rates and superior service, while still safeguarding their personal financial data. The goal, according to the agency, is ensuring that there is a competitive ecosystem for consumer payments will be critical.
Chopra Statement
“The CFPB is working to better understand further details about Apple’s announcement to determine whether it is a meaningful shift away from blocking competitive payments offerings from banks, credit unions, and technology companies other than Apple,” wrote Chopra. “We encourage developers and others with a stake in Apple’s regulations on contactless payments to contact the CFPB’s Office of Competition and Innovation.
CFPB’s published a report last year analyzing the growing tap-to-pay market, where consumers tap a device enabled with NFC to make a payment at the point of sale. The report found Apple and Google, the two dominant mobile operating systems, impose regulations governing how financial companies and app developers offer secure payments using tap-to-pay functionality.
“The CFPB’s analysis showed that Apple’s regulations in the U.S. were very restrictive, blocking access to tap-to-pay functionality for popular payment apps, other than its own proprietary app, Apple Pay… inhibiting new innovations and consumer choice,” wrote Chopra.
Focus on Apple
The U.S. Department of Justice sued Apple in March, partly focused on the restrictive regulations on tap-to-pay. The CFPB has also heard from regulators and central banks from around the world that are concerned about Apple’s regulations.
Facing substantial fines from the European Commission, Apple amended its regulations so developers can build apps to facilitate payments outside of Apple Pay and Apple Wallet, including tap-to-pay transactions. The move comes on the heels of the technology company reaching agreement with EU members on July 11 to allow rivals access to the iPhone’s ability to tap-to-pay in Europe.
To incorporate this new solution in their iPhone apps, developers will need to enter into a commercial agreement with Apple, request the NFC and SE entitlement, and pay the associated fees. This ensures that only authorized developers who meet certain industry and regulatory requirements, and commit to Apple’s ongoing security and privacy standards, can access the relevant APIs, according to the Cupertino, CA-based company.
Chopra said the agency investigation and final ruling is needed as “consumers increasingly move and store their money using mobile device apps, we have seen a rise in Big Tech conglomerates extending their reach into banking and payments.”