When Apple said at WWDC22 in July that it would launch Apple Pay Later with iOS 16, it was effectively entering the short-term lending industry known for its “buy now, pay later” plans.
So it’s no surprise that the Cupertino-based tech giant, used to regulatory scrutiny in the U.S. and abroad, is now facing scrutiny from regulators in the financial industry. .
What’s somewhat surprising, though, is that even before Apple Pay Later was released, regulators were buzzing about many concerns.
Financial regulators concerned about Apple’s planned Apple Pay Later purchase
The director of the U.S. Consumer Financial Protection Bureau (CFPB) said agents are concerned about Apple Pay Later and other big tech companies’ forays into the Buy Now Pay Later (BNPL) lending business.
We can see that the CFPB has already analyzed the BNPL market. He has ordered his five major market players (Afterpay, Affirm, Klarna, PayPal and Zip) to submit detailed information to the agency. This information may lead to legislative action.
And now CFPB director Rohit Chopra says: financial times Regulators ‘will need to consider very carefully’ [at] What it means for Big Tech to enter this space.
He reportedly said his comments were a wake-up call to Big Tech, especially given Apple’s launch of the Apple Pay Later service.
Responding to questions about Apple’s launch, Chopra said big tech companies’ entry into short-term loans “would cause a lot of problems.”
Instead of paying all at once, Apple Pay Later allows buyers to pay in four installments over six weeks at no additional cost. But despite the lack of fees and interest, Apple still benefits from the service. Consumers are warned to use this feature with caution.
Apple originally planned for the service and said it would use Apple ID history as one of its fraud prevention tools, citing a banking partner previously thought to be Goldman Sachs. Decided.
Concerns about customer data
Concerns relate to antitrust laws, privacy and rising consumer debt. One of the main concerns is the collection of customer data.
“Does it combine with browsing history, geolocation history, health data and other apps?” he said. “Big Tech’s ‘buy now, pay later’ ambition goes hand in hand with its desire to dominate digital wallets.”
“Technology giants who have sufficient control over mobile operating systems will have a unique advantage in the broader use of data and e-commerce,” he continued. Such companies will continue to venture into financial services “to better understand consumer behavior.”
Big technology companies that provide financial services such as Alipay and WeChat Pay already dominate the Chinese market. Chopra said he fears such services are “imposing” a “special window” on consumer behavior.
“Overall, I am concerned that we are heading towards such a system.
The CFPB plans to release its first report on BNPL market participants before Cupertino enters the market in September.
Apple’s service, part of Apple Pay, allows users to split the cost of a transaction into four payments over a six-week period.