Federal Reserve Banks Publish Report on Regulatory Landscape for Mobile Payments

CFPB FTC Mobile Payment Systems

Recently, the Federal Reserve Banks of Atlanta and Boston published a report on an April 2012 meeting of the Mobile Payments Industry Workgroup and representatives from federal and state banking regulators, the FTC, and the FCC to review the regulatory landscape for mobile payments. The paper notes that (i) remote payments and money transfers are beginning to emerge to facilitate person-to-person payments and cannot be ignored from a regulatory perspective, (ii) growth in nonbank money transfer services is subjecting more nontraditional technology-based companies to state money transmitter licenses and related regulatory oversight, and (iii) the CSBS and the Money Transmitter Regulators Association are creating a nationwide cooperative supervisory system for the coordinated multistate examination of money transmitters. The report also reflects the meeting participants’ consensus that the existing regulatory framework is sufficient for today’s mobile payment services. Still, the report states that the CFPB plans to review mobile payment disclosure practices to ensure that consumers have sufficient information in the event of account discrepancies, assess how disclosures are provided to consumers, and evaluate how the parties in mobile payment transactions handle error resolution and liabilities.