Are mobile payments safe? That was a question that the House Financial Services Subcommittee on Financial Institutions and Consumer Credit posed to various finance officials earlier today. The subcommittee didn’t get a particularly clear answer.
According to written testimony provided by Stephanie Martin, associate general counsel for the Federal Reserve Board of Governors, defining what protections apply to mobile payment systems is complicated by the fact that many businesses involved in the transfer of money through mobile devices aren’t banks. Companies involved in mobile payment systems that don’t meet the established definition of providing banking services aren’t subject to certain scrutiny, regulation, or consumer protection laws.