Big Tech companies’ role in the financial services sector continues to draw the attention of regulators, with two of the UK’s industry authorities looking into the matter once again.
The Financial Conduct Authority (FCA) and Payments Systems Regulator (PSR), the UK’s regulatory bodies for the financial services and payments sectors respectively, are seeking feedback on Big Tech digital wallets.
Digital wallets are a prominent feature of modern payments systems and general public consumption, the FCA has noted – pointing to how more than half of UK adults now use one.
For the most part, these digital wallets are predominantly provided and operated by Big Tech companies. The most notable names in digital wallets are Google Pay, Apple Pay and PayPal, three of the world’s largest Big Tech firms and staples of Silicon Valley.
“Digital wallets are steadily becoming a go-to payment type and while this presents exciting opportunities, there might be risks too,” said David Geale, the PSR’s Managing Director.
“Collaboration between regulators and working with industry is crucial to ensure we’re on the front foot to support innovation and competition, making sure everyone benefits from access, protection and choice in payments.
“We look forward to hearing views and evidence from a wide range of stakeholders throughout this process.”
Taking note of both the growing adoption of digital wallets and the prominent role Big Tech has in developing and operating these products, the FCA and PSR are looking to better understand the impact this may be having on consumers and businesses.
The regulators are requesting feedback in several key areas. Firstly, the authorities want to understand what benefits digital wallets bring to service users, but also whether any features mean payments don’t work as well as they could for consumers and businesses.
The duo are also interested in whether digital wallets can raise significant competition, consumer protection or market integrity issues. These issues could be ones currently faced by consumers and businesses, or ones projected for the future.
Respondents have a long window to reply to the FCA and PSR’s queries, with the regulators stating that it aims to analyse all responses provided and publish a response by Q1 2025.
Nikhil Rathi, the FCA’s Chief Executive, said: ‘The UK is seeing a seismic shift in how people pay, as digital wallets become a part of everyday life for many people.
‘We want to make sure we can maximise the opportunities and benefits for consumers and businesses while protecting against any risks this technology may present.’
Big Tech’s presence in the payments sector has not gone unnoticed by regulators, particularly in recent years
This is not the first time the UK’s FCA has taken a closer look at Big Tech, for example, with the regulator having launched a consultation earlier this year seeking to establish whether these companies have an advantage over smaller competitors due to a data disparity.
