The expanding usage of digital wallets by large internet businesses is raising concerns about competition, consumer protection, and market integrity, which the British authorities highlighted.
The British authorities announced on Monday that they were investigating whether there are any issues with competition, consumer protection, or market integrity related to the growing use of digital wallets provided by big tech companies. In addition to gathering opinions on the advantages and disadvantages, the Financial Conduct Authority and Payments Systems Regulator will evaluate the effects of digital wallets—like PayPal, Apple Pay, and Google Pay—on competition and the variety of payment choices available at the point of sale.
According to a statement, digital wallets have grown to be “an increasingly important touchpoint” between big tech businesses and UK consumers, with over half of UK adults potentially using them. PSR executive director David Geale stated, “Digital wallets are steadily becoming a go-to payment type, and while this presents exciting opportunities, there might be risks too.” The development of digital wallets, according to FCA CEO Nikhil Rathi, represents a “seismic shift” in how consumers pay, and authorities aim to take advantage of these opportunities while “protecting against any risks this technology may present.”
Congressmen and regulators in the US and Europe have been looking into Big Tech’s expanding influence in the financial services industry. The sector chastised the U.S. consumer watchdog last year for proposing to regulate smartphone wallets and payments. The British regulators claimed that their examination of digital wallets was based on their earlier research on Big Tech companies’ involvement in financial services as well as contactless mobile payments.
By the first quarter of 2025, the regulators will have updated information on Big Tech and digital wallets after taking into account all of the input.
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