Mobile payments in the United States: Are regulations adequately protecting consumers?
| Autor | Kristopher C. Richardson |
| Cargo | Staff Attorney, TSYS; J.D., Oklahoma City University School of Law; B.S., Brigham Young University |
| Páginas | 6-31 |
MOBILE PAYMENTS IN THE UNITED STATES: ARE REGULATIONS
ADEQUATELY PROTECTING CONSUMERS?
*KRISTOPHER C. RICHARDSON
I. Introduction ................................................................................................................................ 6
II. Mobile Payments in the United States .................................................................................. 7
A. Background of Mobile Payments and Current Trends ..................................... 7
B. What Are Mobile Payments and How Do They Work? ................................... 8
III. Current Mobile Payment Ecosystem .................................................................................. 10
A. Traditional participants ........................................................................................... 10
B. New participants......................................................................................................... 11
C. A Crowded and Confusing Ecosystem ................................................................ 14
D. Barriers of Mobile Payment Implementation—Regulations ......................... 14
IV. Mobile Payment Regulatory Landscape ..............................................................................15
A. Agencies Connected with Mobile Payment Regulation ................................. 15
B. Regulations Touching Mobile Payments ............................................................ 18
C. Current Regulatory Climate ................................................................................... 21
D. Laws Governing Mobile Payments Should Not be Updated ........................ 23
E. Laws Governing Mobile Payments Should be Updated ................................. 25
V. Moving Forward ....................................................................................................................... 29
VI. Conclusion .................................................................................................................................. 31
I. INTRODUCTION
For many years, citizens of the United States have engaged in typical
transactions or purchases that usually involve traditional parties, such as
consumers, merchants, and banks; a typical transaction normally utilizes
traditional instruments, such as checks, debit, or credit cards, to transfer funds.
As a recent development in the payment infrastructure, mobile payments have
greatly expanded the possibilities for consumers and others to pay for goods and
services.
2
Gone are the days when consumers and others were confined to
*Staff Attorney, TSYS; J.D., Oklahoma City University School of Law; B.S., Brigha m Young
University. Mr. Richardson would like to thank his wife, Brittany, for her love and patie nce, his
family, for their support and e ncouragement, and his daughter Sophie, whose birth was a blessing
while writing this Note.
2
Robert C. Drozdowski et al. , Fed. Deposit Ins. Corp., Mobile Payments: An Evolving Landscape, 9
SUPERVISORY IN SIGHTS, no. 2, Winter 2012 at 3, http://www.fdic.gov/regulations/examinations/
supervisory/insights/siwin12/SIwinter12.pdf.
No. 1
Mobile Payments in the United States: Are
Regulations Adequately Protecting Consumers?
7
traditional parties and instruments when making purchases or performing
transactions.
3
Take your daily trip to Starbucks Coffee for example. Traditionally,
payment for your purchases has been confined to the traditional instruments
mentioned above. Now customers can pay for their purchases without ever
pulling out their wallets; customers pay for their purchases simply by waiving
their equipped smartphone in front of a scanner at a Starbucks’ register.
4
Although the absence of the need to carry a physical wallet is certainly appealing
and convenient, many consumers have concerns about mobile payments.
5
For
example, what avenue of recourse is available for consumers who equip their
smartphones for mobile payment transactions and subsequently lose their phone?
Are consumers adequately protected from fraudulent charges? The answers to
these and similar questions are discussed below.
This Article defines the evolution of mobile payments in the United
States, describes the current mobile payment ecosystem, analyzes the mobile
payment regulatory landscape, including the industry split on whether
regulations governing mobile payments need to be updated or not, and criticizes
the stance that regulations do not need to be updated at this time.
II. MOBILE PAYMENTS IN THE UNITED STATES
A. Background of Mobile Payments and Current Trends
Over the past several years, the citizens of the Unites States have
witnessed how cell phones have brought monumental changes to everyday life.
6
Cell phones, “the world’s most ubiquitous computer,” have become a basic
necessity of an average person’s everyday life.
7
In fact, more than eighty-seven
percent of the United States population currently uses cell phones.
8
In 2012, more
than half of the American population owned smartphones.
9
Smartphones have
3
Id.
4
Meena A. Rajan, The Future of Wallets: A Look at the Privacy Implications of Mobile Payments , 20
COMMLAW CONSPECTUS 445, 449 (2012).
5
David McAuley, Senate Panel Launches Hearings Aimed At Emerging Mobile Payments Trends , 13
COMPUTER TECH. L. REP. 270, 270 (2 012), http://www.bloomber glaw.com/document/
XLDHG7G5GVG0/download?doc_container=content_document&documentName=XLDHG7G5G
VG0.PDF&document_type=BNA_ISSUE&fmt=pdf&hierarchical_toc=true&root_url=http%3A%2
F%2Fwww.bloomberglaw.com%2F&web_base_url=%2Fdocument.
6
John Markoff, The Cell phone, Navigating Our Lives, N.Y. Times, Feb. 16, 2009,
http://www.nytimes.com/2009/02/17/science/17map.html?pagewanted=all&_r=0.
7
Id.
8
Drozdowski, supra note 2, at 3.
9
Timothy R. McTaggart & David W. Freese, Wireless Carriers and Mobile Payments: What’s th e Call on
Regulation?, 31 BANKING & FIN. SERVICES POL’Y REP., no. 9, Sept. 2012 at 1, 1 (footnote omitted).
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