WASHINGTON— Big tech payment apps are the “holy grail” of surge pricing, according to CFPB Director Rohit Chopra.
“Companies want transaction data so they know how much you're willing to pay,” the regulator said, according to a MarketWatch report.
Surge pricing is a reference to increasing prices when demand is highest. The practice of "surge" or "dynamic" pricing is common in markets ranging from airlines to supermarkets - and U.S. regulators are concerned that the growing role of tech giants will further power this trend at the expense of the American consumer, MarketWatch reported.
Chopra told MarketWatch in an interview that he is watching how interested some tech companies are in compiling transaction data on U.S. consumers.
‘Paws on Data’
"Tech companies such as Venmo, Cash App (SQ), PayPal (PYPL) - many firms are looking to get their paws on transaction data because transaction data, I think, will be the holy grail for doing personalized pricing," Chopra said. "Companies want the transaction data, so they know how much you're willing to pay."
Surge pricing isn’t limited to big tech. Wendy’s recently announced plans to raise prices during its busiest times before the plan was abandoned following strong criticism.
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