While consumers do not use mobile payment platforms as much as traditional credit card transactions, the seeming inevitability of the former overtaking the latter has many experts worried about whether the industry needs to be regulated separately.
Late last month, lawmakers in Congress held a pair of hearings on the topic of the necessity for regulation of the mobile payment industry, weighing arguments on both sides of the issue, according to a report from American Banker. On the one hand, some experts have noted that because mobile payments are expected to become more or less ubiquitous within the next three years or so, it may be necessary for both consumers and the companies pushing these payment platforms to have as much of an understanding and regulatory presence in place as soon as possible.
These proponents of a new regulatory framework for mobile payments specifically note that there is a considerable gap between rules for mobile companies and financial ones, meaning that each may not be quite sure what is expected of them in this developing industry, the report said.
However, some experts also believe that because there is now so much regulation for both the banking and telecom industries, adding another entity may simply serve to introduce too much oversight for companies, potentially making it difficult for them to comply with all rules, the report said. Instead, they argue it may be more prudent to simply build new regulations into laws already in place.
"Mobile [payments] may have some additional complexities in terms of the layers of players, such as the mobile carrier, which may be subject to its own regulatory framework as a communications provider," Jessica Sklute, special counsel at Schulte Roth and Zabel LLP, told the news site. "But for the most part, as with any other payment form, it can be conducted within the existing regulatory framework if the provider of the financial service is properly regulated, such as a bank or regulated money transmitter."
Mobile payments are expected to be adopted on a widespread basis within the next few years, with some experts predicting that the industry as a whole could be worth anywhere from $44 billion and hundreds of billions annually by the end of 2015.
