The chairman of the United States Consumer Financial Protection Bureau (CFPB) has stated that the agency is concerned about Apple Pay Later and other big tech companies entering the “buy now, pay later” (BNPL) loan market.
Already, the CFPB is investigating the BNPL sector, and five existing companies have been required by law to provide extensive information to the bureau. According to the Financial Times, CFPB head Rohit Chopra adds that the agency will also “had to take a very thorough look [at] the ramifications of Big Tech entering this market.”
In light of Apple’s recent announcement of Apple Pay Later, the publication claims that his remarks were meant as a warning shot to the Silicon Valley.
A Big Tech corporation entering short-term financing “raises a lot of difficulties,” particularly around the customer data obtained, Chopra said when asked about Apple’s launch.
Then he asked, “Is it coupled with browsing history, location history, health data, other apps?” he said. To understand Big Tech’s ‘buy now, pay later’ objectives, one must understand their drive to control and monetize digital wallets.
“Any tech firm that has a lot of control over a mobile operating system would have unique advantages to exploit data and ecommerce more widely,” he stated. In order to “get even deeper information on consumer behavior,” a financial services corporation will continue to expand its reach.
Big Tech companies that provide financial services, such as Alipay and WeChat Pay, already dominate the Chinese industry. Chopra expressed concern that such services “intrusively” gain a “amazing window” into consumer behavior.
In general, he expressed concern that the country was headed in that direction.
In September, the CFPB will release its first report on the BNPL market players before Apple’s arrival.
Apple has integrated its services into its Apple Pay offering, allowing customers to pay for purchases in instalments of up to four dollars spread out over a period of six weeks.