CFPB to Regulate Cash Apps Like Apple and PayPal Under New Rule

The Consumer Financial Protection Bureau (CFPB) announced on November 21 that it will begin supervising non-bank financial service providers, including popular payment and wallet apps from tech giants like Apple, Google, and Amazon, as well as firms such as PayPal and Block. This landmark rule, set to take effect 30 days after its publication in the Federal Register, will also extend to peer-to-peer payment services, bringing a new level of oversight to the digital finance space.

A Booming Sector Under Scrutiny

The CFPB estimates that the apps covered by this rule process over 13 billion consumer transactions annually. Targeting companies handling at least 50 million transactions per year, the regulation aims to ensure these tech-driven financial platforms comply with the same federal laws that govern traditional banks and credit unions. “Digital payments have gone from novelty to necessity, and our oversight must reflect this reality,” said CFPB Director Rohit Chopra. He highlighted the rule’s goals: protecting consumer privacy, preventing fraud, and stopping illegal account closures.

Closing a Regulatory Gap

For years, tech companies and payment apps have operated with less scrutiny than traditional financial institutions, often partnering with banks to sidestep direct regulation. The CFPB flagged this loophole last year, and this rule is its response. It will allow the agency to closely monitor these newer players, which have become essential financial tools for millions of Americans. The bureau noted that consumers are increasingly using these apps as alternatives to traditional bank accounts—holding balances, making transactions, and transferring cash directly from their phones. “What began as a convenient alternative to cash has evolved into a critical financial tool, processing over a trillion dollars in payments,” the CFPB stated.

Who’s Affected—and Who’s Not

The rule applies to major tech firms and payment providers but exempts apps tied to single retailers, like Starbucks, that function solely within their own ecosystems. Meanwhile, peer-to-peer platform Zelle pushed back, asserting it’s already under oversight. “Zelle has been supervised by the CFPB and the OCC since the Network’s inception in 2017,” the company said, emphasizing its compliance and its role serving 143 million users, small businesses, and over 2,200 financial institutions. “Innovation, security, and regulation are not mutually exclusive,” Zelle added.

What’s Next?

As digital wallets and payment apps cement their place in everyday life, this rule marks a significant shift in how they’ll be held accountable. With the CFPB stepping in, consumers can expect greater protections—though the move may spark debates over innovation versus regulation in the fast-evolving fintech world. Stay tuned as this oversight takes effect in the coming weeks.