Over the last several months, companies in a number of industries have made significant advancements in developing and rolling out mobile wallet payment systems, and now, those platforms are coming under the scrutiny of federal lawmakers.
Several members of the U.S. Congress are now expressing an interest in the developing world of mobile wallet technology because many experts believe this is the emerging frontier in consumer transactions, and will likely seek more regulation than currently exists, according to a report from the news site Politico. In particular, lawmakers may have questions related to exactly whose jurisdiction these payment platforms fall under, and what marketing and privacy laws may affect the use of these programs.
“We are, I think, on a precipice of some fundamental change in the way money is exchanged between consumers and businesses,” Rep. Shelley Moore Capito, a West Virginia Republican, said during a recent hearing for the House Financial Services Committee consumer credit panel, according to the site. “There’s a lot for Congress, banks, regulators, retailers and customers to learn. Most importantly, we want to make sure these payments are safe and secure.”
This issue also relates to the efforts at the federal level to mandate increased security for traditional credit cards, in that consumers will likely tie their existing accounts to mobile wallets, as well as protect the often sensitive data normally stored on smartphones, the report said. Further, continued scrutiny of these payment platforms is expected from other agencies as well, including the Federal Trade Commission and Consumer Financial Protection Bureau.
Fortunately for all involved, these inquiries come at a time when the mobile wallet industry is still burgeoning, the report said. Recent data from the Federal Reserve shows only 12 percent of smartphone users made “mobile payments” last year, and the study considered such transactions much more broadly than just mobile wallets. This indicates that though the technology is largely there to complete these purchases, consumers have been relatively slow to adopt its use.
[Credit Cards: Research and compare credit cards at Credit.com.]
However, experts also say that when adoption does happen, it will likely happen quickly. Some analysts predict that the mobile payment industry could be worth as much as hundreds of millions of dollars annually by the end of 2015.