Amid concerns about how the growing presence of big tech companies may affect competition and systemic risk in the financial sector, the U.K.’s Financial Conduct Authority (FCA) and the Payments Systems Regulator (PSR) launched a joint consultation on digital wallets being supplied by so-called Big Tech such as Apple, Google and PayPal.
The regulators noted that the use of digital wallets has grown rapidly in the past few years, and that it’s estimated that over half of adults in the U.K. now use one. As a result, regulators are consulting on the risks and benefits of these services for consumers and the financial sector.
In particular, they’re concerned about possible consumer protection and competition challenges, and market integrity issues that may already exist — or could emerge — due to the growing prevalence of digital wallets provided by some of the world’s biggest tech companies.
“The U.K. 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 maximize the opportunities and benefits for consumers and businesses while protecting against any risks this technology may present,” said Nikhil Rathi, chief executive of the FCA, in a release.
“Digital wallets are steadily becoming a go-to payment type and while this presents exciting opportunities, there might be risks too,” said David Geale, managing director of the PSR.
“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,” he said.
The consultation is open until Sept. 13.
The regulators said they will provide a policy response to the consultation by the first quarter of 2025.