Google Sues the CFPB After the Agency Slams Google Over a Wallet It No Longer Offers in the U.S. Market

Google Inc. has sued the Consumer Financial Protection Bureau following the CFPB’s action Friday asserting federal supervision of the company’s Google Pay wallet.

In the suit, filed in U.S. District Court in Washington, D.C., the same day the CFPB acted, the tech giant argues the case targets a payment service Google no longer offers in the U.S. market. The CFPB dismisses this contention, asserting it maintains supervisory authority regardless of whether a product has been discontinued.

The company, a unit of Alphabet Inc., also maintains the CFPB is acting on the basis of “a small number of unsubstantiated user complaints,” rendering the supervisory authority “burdensome.” At the same time, the CFPB has set what the company views as a “low bar” for its standard of consumer risk.

The company’s decision to remove Google Pay from the U.S. market, however, does not exempt Google from supervision, the CFPB argues. That contention baffles some observers. “It does not make sense,” says Cliff Gray, principal at the payments consultancy Gray Consulting Ventures. But the decision to target Google nonetheless “does not surprise me,” he adds. “The CFPB has been chomping at the bit, and Google’s a wide-open target.”

Still, he argues, digital wallets are generally a more secure product than physical ones, a point he says federal watchdogs ought to consider. “Consumers pick an e-wallet that makes the most sense to them,” he says, “and now you have this government agency saying you can’t do this.”

Google shut down Google Pay in America in June, but a separate product, Google Wallet, remains available in the U.S. market. It stores payment cards, boarding passes, and other items commonly found in physical wallets.

Google Pay emerged in 2018 as the result of a combination of a former Google Wallet app, launched iin 2011, and Android Pay, a contactless-payment capability introduced in 2015. The current Google Wallet debuted on Android smart phones in July 2022.