The U.S. government may need to develop rules to keep pace with rising use of mobile-payment systems, a Consumer Financial Protection bureau official told lawmakers in a statement prepared for a hearing tomorrow.
“To the extent that technology companies begin to play roles traditionally performed by banking institutions, we may need to reconsider how well our existing regulations apply to a changed environment,” Marla Blow, the bureau’s assistant director for card and payment markets, said in a written statement for a House Financial Services subcommittee.
The panel is holding the hearing to weigh how the goverment should regulate mobile payments, transactions conducted via smartphones or other portable devices. Blow said the bureau will be “flexible and responsive” to the changing marketplace, which she described as beneficial to consumers.
“Innovation can be greatly advantageous to consumers, offering new tools for people to better control their own finances and plan their own lives,” Blow said. “The connectivity and computing power of a modern smartphone could be used to develop rich applications that provide better services at lower costs.”
Blow said risks to consumers could stem from “the very nature of mobile payments,” which aren’t yet widespread in the U.S. For example, small mobile device screens complicate disclosure of terms and conditions, which are in any case “frequently bypassed with a single click,” she said.