CFPB sets sights on Apple Pay Later

Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra said that Big Tech’s expansion into the BNPL space raises privacy and antitrust issues. To date, Apple is the only tech giant to launch a BNPL product, which is called Apple Pay Later.

Why should we care?
While Apple’s move into BNPL will leverage the Apple Pay network and Apple’s reach through hardware to scale quickly, this combination of software and hardware is what makes Apple Pay Later a potential privacy risk. If Apple has access to users’ health information through its Apple Watches, for example, there are few frameworks in place that prevent Apple—or other tech giants moving forward—from combining that data to develop consumer insights, and potentially determine loan terms with individual applicants on the basis of data that, to date, has not informed lending decisions. “Any tech giant that has a lot of control over a mobile operating system is going to have unique advantages to exploit data and ecommerce more broadly,” Chopra said. Apple has branded itself as a privacy advocate, but, especially with the right financial incentives, little prevents the company from compromising on those stated values. What’s more, other companies like Google and Meta have harvested data with controversial results; their potential expansion into BNPL, Chopra says, collapses the long-existing boundary between commerce and finance, which may require regulators to step in and balance the competing needs of privacy and innovation.