Mobile Wallets and the Law
At the dawn of 2012, more and more companies have begun to pursue the "mobile wallet" payment system as an alternative (and perhaps upgrade) to traditional commercial strategies. This has led to increased action in Congress to ensure that the financial system is prepared for the demand.
The internet has changed the world in so many ways in such a short amount of time that many people might even have trouble remembering what life was like before the digital age. Fortunately, most people have embraced the positive changes that the internet has brought to business and industry.
Changes that the internet has brought about include recent significant advancements in the development of the mobile wallet payment system that is rendering paper money (and even credit cards) almost obsolete. While this is of great benefit, there is still much to do to make sure that the transition into the future moves smoothly.
The Current Situation
Currently, more and more mobile wallet payment systems are being developed by innovative companies with great big ideas that are quite promising. These ideas, of course, come under equally great scrutiny among federal lawmakers who have to make sure that everyone's best interests are protected. While they are not so quick to simple allow every new idea to litter the marketplace, they are quite aware of what is on the horizon and are appropriately working to make the concept work for everyone involved. The progression of mobile wallets and the corresponding technology affects:
Obviously, that's a lot to think about; fortunately, it is still early in the debate.
During a recent hearing for the House Financial Services Committee, Rep. Shelley Moore Capito, of West Virginia says:
We are…on a precipice of some fundamental change in the way money is exchanged between consumers and businesses. There's a lot for Congress, banks, regulators, and customers to learn. Most importantly, we want to make sure these payments are safe and secure.
Safety and security, perhaps, are what Congress is most interested about, which makes a lot of sense in light of the recent Fair Credit act and other credit card reform measures that have only occurred in the past few years. With so many changes happening so quickly in such a short amount of time, it's no wonder they are so focused on making this as smooth a transition as possible.
Of course, the issue of safety is not an easy one to simply resolve. Efforts on the Federal level are going towards protecting consumers as they link their existing credit/ debit accounts to mobile wallets. This is extremely important because when you start doing this, as a consumer, you are making not only your money more exposed on the internet, but you are also making your financial information and other pertinent personal information more readily available too.
Thus, both the Federal Trade Commission and the Consumer Financial Protection Bureau are hard at work to make these changes happen, as well as establish a responsible method for maintaining accounts and for marketing products. Of course, this is just the beginning.
It is extremely fortunate for everyone involved with this process that questions and concerns are being raised during the transition period, while there is still time to get ahead of the curve and fix things before major problems arise. For example, the Federal Reserve shows that only 12 percent of smartphone users made "mobile payments" last year, which includes alternative payment methods that include (but are not exclusive to) mobile wallets.
While this number is somewhat low in the area of concern it is certainly an indication of an increased an awareness and the potential for more willingness in this method in the very near future. What this says for the financial industry, as well as for consumers, is that the mobile payment industry could be worth hundreds of millions of dollars by the close of 2015.
As technology improves and consumers increase their awareness of it, Congress must adapt. Hopefully, all parties involved will be able to work out the kinks in order to effectively establish a mobile wallet payment policy that benefits everyone within the next few years.
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