Congress eyes mobile payment apps

It’s already a social network, an inbox and a gaming console — and, for a small but growing number of smartphone owners, their beloved device is becoming a mobile wallet, too. But the neophyte market for apps and other tools that allow consumers to swipe their phones instead of their credit or debit cards at the register is compelling some policymakers to revisit privacy, security and banking rules written in a seemingly more analog time.

“We are, I think, on a precipice of some fundamental change in the way money is exchanged between consumers and businesses,” said Rep. Shelley Moore Capito (R-WV) during the House Financial Services Committee consumer credit panel’s hearing on The Future of Money last week. “There’s a lot for Congress, banks, regulators, retailers and customers to learn. Most importantly, we want to make sure these payments are safe and secure.” Policymakers have questions about jurisdiction — such as which agency should be chiefly in charge — and fears that laws meant to shield consumers from unwanted marketing may need an upgrade in the dawning age of mobile payments. Those debates only add to the larger difficulty of devising ways to protect a consumer’s 16-digit card number and expiration date, not to mention the privacy of all the other personal data encapsulated in a smartphone.

Congressional scrutiny is expected to continue: The Senate banking committee on March 29 will hold the latest in its series of planned sessions on the mobile payments issue, and it plans to call witnesses from the Federal Reserve system to discuss information security and financial disclosure issues.