Participants in a cross-industry forum to help develop U.S. mobile payments technology are nearing completion of a white paper that aims to identify the significant obstacles and opportunities facing the industry, Richard R. Oliver, executive vice president of the Federal Reserve Bank of Atlanta, told attendees Oct. 5 at SourceMedia’s ATM, Debit & Prepaid Forum in Phoenix, Ariz.
Some 20 undisclosed participants in the Mobile Payments Industry Roundtable, a forum recently created to help bridge obstacles to U.S. mobile payment adoption, plan to release the paper before the end of this year. The paper will form the basis for a series of industry conferences next year that may help move mobile payments forward, Oliver says.
“We have agreed on a series of foundational blocks and elements (for establishing widespread mobile payment technology in the U.S.),” Oliver says, noting that many specifics remain unclear about exactly how mobile payments will unfold on a broad basis in the U.S.
“The focus (of U.S. mobile payments) is probably going to be Near Field Communication off of terminals equipped for that, and (channels for) clearing and settlement (of payments) should be through cards, the automated clearinghouse and, in some cases, telecommunication accounts,” Oliver says. He suggests thinking of mobile payments as a virtual wallet that contains multiple applications for various types and brands of cards.
So far it is clear that telcos do not want to play the role of banks, Oliver says, while banks continue to wrestle with various models for handling mobile-payments risk and fraud and pathways to earn revenues from mobile payments.
In any broad mobile-payments model that emerges in the U.S. there would likely be a role for a third-party “trusted service manager” that would help connect and coordinate roles among telco carriers, device manufacturers and banks, Oliver says. “We may be talking about a trusted service manager whose job it is to stand between all the players and decide the rules for playing together (in mobile payments).”
Oliver envisions the third-party agency’s role might be similar to the role NACHA plays in managing the nation’s automated clearinghouse network.
“We need to adopt standards and controls that would allow interoperability (between mobile payment players), to develop revenue models and revenue-sharing opportunities; we need to figure out how to mitigate risk so we have security integrity, and (we can) make this a seamless experience for consumers,” Oliver says.
Many uncertainties also surround the question of which agencies might regulate mobile payments, which cross many industries, Oliver says.
“Mobile payment (appears to be) very fragmented,” he says, noting that existing regulatory bodies oversee the safety and security of bank payments, cross-border issuers and fraud, but the Federal Communications Commission, which oversees telco carriers’ operations, has not yet become involved in regulating payments.
Oliver speculated that one solution to the fragmented regulatory issues is an “umbrella” regulatory agency that could possibly emerge in the future to oversee U.S. mobile payments.
“If (the white paper) encourages debate and collaborative work (among mobile payment industry participants), we may see movement in this area,” Oliver said, noting that in the meantime individual participants are pushing forward with various mobile payment technology development and pilots.
What do you think about this? Send us your feedback. Click Here.