The Consumer Financial Protection Bureau (CFPB) announced on Friday that it had placed Google Payment Corp. under federal supervision, a move that could subject the company to the same routine inspections and monitoring imposed on banks. This decision stems from concerns over Google’s error resolution and fraud prevention practices, particularly with its Google Pay Balance and peer-to-peer payment services, which the agency claims posed risks to consumers. These services were discontinued earlier this year.
According to consumer complaints cited by the CFPB, Google allegedly failed to thoroughly investigate fraudulent charges and didn’t adequately explain the results of its investigations. However, Google has challenged these findings, filing a lawsuit to block the CFPB’s order. The company argues that the complaints are “unsubstantiated” and calls the agency’s actions an example of government overreach. José Castañeda, a Google spokesperson, stated that the peer-to-peer payment platform in question "never raised risks" and emphasized that it is no longer available in the U.S.
The CFPB clarified that its decision to place Google under supervision doesn’t imply that the company is guilty of any wrongdoing. Rather, it reflects the agency’s intent to ensure consumer protection in the digital payment space. This move aligns with broader regulatory efforts to impose stricter oversight on digital wallet providers like Apple Pay and Cash App, bringing them more in line with traditional banking standards.
Google’s legal challenge underscores tensions between tech companies and regulators as digital payment platforms face increasing scrutiny. The outcome of this case could set significant precedents for how these platforms are governed in the future.