Is Your Business Ready for Mobile Payments?

Mobile payments are expected to top $170 billion worldwide this year, according to a Gartner study published earlier this week.

Three recent updates take a look at issues facing merchants who are considering – and in many cases already implementing – systems for accepting payments via smartphone or other mobile devices.

The first discusses a report from the PCI Security Standards Council on the protection of consumer data when allowing mobile payments. From law firm Loeb & Loeb:

“… the PCI Council’s guidance is intended to provide merchants with actionable recommendations on accepting payments via mobile devices in a manner that comports with the PCI Data Security Standard (PCI DSS)… The PCI Council reasoned that taking additional measures for securing mobile payments is important because there are limited security safeguards on current mobile devices for payment acceptance, responsibilities for security in the mobile ecosystem span multiple payers, protecting cardholder data is required under the PCI DSS, and securing mobile acceptance supports consumer confidence.”

The second, from law firm Mintz-Levin, looks at a late-April conference hosted by the Federal Trade Commission as an indication of trends in the industry:

“In another sign that the US Government is getting serious about dealing with the nascent, yet burgeoning industry of mobile payments, the FTC hosted a series of panels with key stakeholders … to explore the use of mobile payment applications and their impact on consumers and businesses. The opportunities discussed on the panel for consumers including have access to up-to-date information about account balances and spending habits, as well as access to custom-tailored loyalty rewards programs. The benefits for merchants comes from the ability to accept credit card payments – particularly micro-merchants, collect data on the spending habits of their consumers, and (perhaps in the future) to implement dynamic pricing.”

Finally, law firm Davis Wright Tremaine also reports on the FTC conference, with a particular focus on federal regulation of transactions and technologies:

“The FTC seems on safer ground in focusing on privacy issues, for which it has retained broader jurisdiction, and is likely to serve a valuable function by embedding the policy discussion in the broader context of innovations in e- and m-commerce. Hopefully the agency will continue to move incrementally to ensure that the consumer’s voice can clearly be heard in the marketplace by adopting or rejecting offerings from the increasingly crowded menu of competing mobile payments and commerce products and services.”

Taken together, these updates offer a useful overview of legal and regulatory issues surrounding the use of mobile payments for merchants and business owners.

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