CFPB Will Treat Payment Apps Like Banks | Global News Avenue

The government’s banking regulator plans to keep a close eye on payment apps like Venmo and PayPal from now on.

The Consumer Financial Protection Bureau (CFPB), which regulates consumer financial services, finalized a rule Thursday that would allow the agency to inspect fintech companies on a regular basis, just as it does with banks and credit unions. The rules will apply to the largest players in the payments business, covering those processing 50 million or more transactions per day.

Under the new rules, CFPB inspectors can visit fintech companies, interview employees and review documents to ensure they comply with rules regarding consumer privacy, fraud and closing customer accounts.

“Digital payments have moved from novelty to necessity, and our regulations must reflect this reality,” CFPB Director Rohit Chopra said in a press release. “This rule will help protect consumers protect user privacy, protect against fraud, and prevent illegal account closures.”

Major digital payments companies include Apple (AAPL), Google (Google, Google), Amazon (Amazon), Yuan (Mehta), blocked (square number) and PayPal (PYPL).

The rule is announced last year, The bureau made some modifications based on the original version, such as raising the regulatory threshold from 5 million to 50 million transactions per day and clarifying that only U.S. dollar transactions are covered.

The rule is the CFPB’s latest move to bring greater scrutiny to payment apps as these services have grown in popularity in recent years. Last year, the bureau warned consumers that the FDIC does not insure funds Stored in payment application Just like funds being deposited into a bank account.