Mobile payment development may be held back by the unnecessary confusion surrounding mobile wallet security and standards, according to a top MasterCard executive.

It has reached the point where "mobile wallet is a dangerous word, bandied about many times by people who don't really understand what it means," James Anderson, MasterCard Worldwide's senior vice president of mobile and emerging payments, told attendees at the Smart Card Alliance's NFC Summit May 22 in Burlingame, Calif.

By MasterCard's definition, a digital wallet is a user interface that allows a consumer to choose among various payment methods. It has little to do with actually executing a payment, Anderson said during a telephone press briefing.

Executing a payment requires a mobile payment method, such as MasterCard's PayPass (see story), which authorizes a card transaction and may be embedded into various types of mobile wallets, he said.

The problem comes when people confuse mobile wallets with mobile payments, Anderson said.

Mobile wallets may take many forms. Existing mobile wallet providers such as Google Inc., Isis, banks and mobile network operators will each "have a point of view" on what consumers want, he said.

"We are less concerned about standardization around the user interface, because we think that's really the zone where different companies will assemble different value propositions," Anderson said.

Various mobile wallets may harness different payment methods and other features that will appeal to certain types of customers.

"We think that's great because we don't think any one company has a monopoly on wisdom as to what the consumer wants," he said.

However, there is a need for strong security and standardization among payment methods "deeper down in the stack where you're dealing with two entities that have to transact," Anderson said.

There is little to fear about security for routine mobile payments, Anderson said.

"Consumers are much smarter than we sometimes give them credit for," he said, and they will adjust their habits around using passwords and protecting their phones.

"Consumers are pretty savvy about figuring out what's at risk," he said.

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