US consumer watchdog proposes rules for Big Tech payments and digital wallets. Because digital payments and smartphone wallet services offered by internet firms match traditional payment methods in scope and size but lack consumer protections, the leading U.S. consumer finance watchdog urged Tuesday to regulate these services.

According to the proposal from the Consumer Financial Protection Bureau (CFPB), businesses like Alphabet (GOOGL.O), Apple (AAPL.O), PayPal (PYPL.O), and Block’s CashApp (SQ.N.) would be subject to oversight similar to that of banks. Examiners from the CFPB would check the companies’ privacy policies, executive conduct, and compliance with laws prohibiting unfair and deceptive practices.

According to a CFPB official, if approved, the plan would apply to around 17 businesses that collectively transmit more than $13 billion in payments annually. The government did not disclose whether more systems, besides GooglePay, ApplePay, PayPal, and CashApp, would be protected.

Google, Apple, PayPal, or CashApp did not immediately answer a request for comment. The plan is CFPB Director Rohit Chopra’s long-awaited and bold attempt to establish the agency’s total control over Big Tech, a company he has regularly chastised for concerns about competition and privacy.

Since taking over as director in 2021, Chopra has gradually raised the CFPB’s level of industry monitoring. In 2021, the agency requested information about how Big Tech firms utilize consumer data, and the previous year, it initiated an investigation into their payment platforms.

In a statement on Tuesday, Chopra claimed that the internet industry had expanded into the highly regulated banking sector’s former market for financial services.

“Today’s rule would crack down on one avenue for regulatory arbitrage by ensuring large technology firms and other nonbank payment companies are subjected to appropriate oversight,” he stated.

In a lecture last month, Chopra claimed that a CFPB investigation had revealed that internet companies were gathering enormous amounts of payment information from customers with no restrictions, little transparency, and murky corporate practices, putting customers at risk of surveillance by companies like those in China.

Senior CFPB officials, speaking on Tuesday’s plan, stressed the need to investigate privacy compliance at these larger companies with vast amounts of consumer data, pointing out that selling that data is a critical component of many of their business models.

Prominent tech company representatives have already emphasized how hard they work to secure customer data.

The plan on Tuesday would apply to businesses that process more than five million transactions annually. According to the agency, the regulation would also promote competition by guaranteeing that the Internet sector and conventional financial firms would be subject to the same level of scrutiny. There is now a notice-and-comment process on the project, which is anticipated to finish in early 2024.