Atlanta Fed Exec Dispels Mobile Payments Myths
As with anything new and unfamiliar, the emerging mobile payments system has a number of misconceptions about it. But as this system grows more robust in the United States, fact and fiction surrounding mobile payments require clarification for a public often reluctant to embrace new ways of paying for goods and services.
Cindy Merritt, assistant director of the Atlanta Fed's Retail Payments Risk Forum (RPRF), attempted such clarification in a recent interview and blog post. The interview with Merritt, featured on the online payments industry forum PYMNTS.com, highlighted some common myths about mobile payments and suggested ways in which banks and merchants can help dispel them.
Drawing important distinctions
Merritt also dispelled the myth that mobile payments lack regulation. This is not the case in the United States, where mobile payments simply offer an alternative channel to existing payment networks. "All of the rule sets, laws and regulations, and consumer protections that govern retail payments today will simply migrate to the mobile channel," Merritt wrote. In emerging economies, a different form of mobile payments has grown around airtime minutes, which are used to pay for goods and services. As a result of these differences and others, the regulatory structure around each system is different, too.
Discussing security features
What can banks and merchants do to help dispel the myth that mobile payments are less safe than traditional payment mechanisms? Banks are taking steps that include offering trials with interim technologies like stickers that affix to the phone and enable mobile payments, Merritt said. Indeed, the outpouring of monetary donations following the Haiti earthquake showed that consumers will use mobile payments when they are offered a service that they want and that is easy to use, she noted.
To learn more about the emerging mobile payments system in the United States, listen to the PYMNTS.com interview, read Cindy's post on the RPRF's Portals and Rails blog, or read the RPRF's recent white paper on how a successful mobile payments system could evolve in the United States.
June 23, 2011