05-02-13 | Blog Post

2013 ETA Expo: Government Panel Discussion

Blog Posts

Online Tech is exhibiting PCI hosting solutions at the 2013 ETA (Electronic Transactions Association) Annual Meeting & Expo at booth #1237. The conference will be held in New Orleans from April 30-May 2 at the New Orleans Convention Center.

Government Panel
Panelists: Marla Blow, Associate Director, Cards and Prepaid Markets Division, Consumer Financial Protection Bureau
Patti Poss, Chief of the Mobile Technology Unit, Division of Financial Practices, Bureau of Consumer Protection, Federal Trade Commission
Maximilian D. Schmeiser, PhD, Economist, Consumer Research Section, Consumer and Community Affairs, Board of Governors of the Federal Reserve System
Moderator: Jason Oxman, CEO, ETA

All the vendors in attendance at the show are behind every consumer transaction in the industry.

The panel was an introduction to the government bodies that are involved within the industry. Each panelist explained what they did and their role within the payments industry.

Patti: With the Mobile Technology unit and it works across the consumer safety program. The FTC has been focusing on mobile technology for a while now. The FTC has broad jurisdiction across the industry. Mainly focus on protecting consumers from unfair and fraudulent actions within the industry.

Marla: CPD has been around for about two years. Clarity within the market, making sure institutions are playing by the rules, ensuring there is a level playing field. Making sure banks and non-banks are held to the same standards. Within the bureau, she works with policy specifically.Think about privacy and work with the FTC on privacy issues. Mobile, payments, credit cards debit cards, retail checking accounts.

Max: Heading the boards efforts for consumers move to mobile financial transactions. Corresponding reports, access consumer financial services 2013 (Google). Works with several federal reserve groups that monitor financial transactions. On a group that watches issues with mobile financial services. Strong interest in anything that touches the US financial payments. monitor payment trends. Collaborate with other regulators on issues related to mobile payments.

What should the industry be doing? What gaps do you see in the industry?

Patti: Just because there is a new medium doesn’t mean there are no rules there. In regards to online and mobile payments.

Marla: How mobile payments are different from traditional transactions. Mobile brings more people to the table, thus making regulations more tedious and time consuming. Particularly for merchants who don’t technically read the regulations around the financial transaction areas.

Where are we in the educational effort in relation to mobile payments in regard to consumers? What are their concerns? What does that tell us about what the industry should be doing?

Max:  Consumers are aware of its existence, but are not sure how or where they can make such payments. Main reasons some people don’t use it:

  1. Security – Concerned with it broadly (maybe not accurate)

  2. Just don’t see any benefit – appears too complicated for them. They like the ease of traditional payment methods.

Patti: We looked at three areas that offer potential with mobile payments for consumers:

  1. What happens when something goes wrong? – Do consumers have the correct info and know who to go to when something goes wrong, and do they know what sort of liability are they taking on?

  2. Security – Is the information secure and how they are protecting consumers sensitive financial information?

  3. Privacy – Lots of joint partnerships that can develop, but that comes in exchange for data. Who gets the data? Do the consumers know who has the data?

Marla: Questions have been raised as to how to best notify the consumers of the terms they are accepting and how those agreements appear on a small mobile screen. Trying out figure out if  there is a better way to get information to consumers so they can more readily digest terms and conditions.

There is a micro and macro level market going on with the mobile payment space. There is obviously concern with protecting privacy when a consumer uses their phone to make a payment, but does not want to receive tons of marketing notifications from those vendors in the future. How well is the industry walking that line?

Patti: There is a general framework I will talk about to answer that.

  • Privacy by design – Are merchants thinking about privacy as they are really developing their products or are they slapping it on at the last minute? Do you know where the data flow is going and coming from.

  • Simplified choice – Do you have pages and pages for consumers to read so they know where their data is, or can you boil it down and make it clear and easily understandable for consumers to read.

  • Transparency – Is there somewhere consumers can go to actually learn about what you are doing with their data

Max: There is some inconsistency between consumers in what they say and what they do. They say they absolutely will not give up their information and location to receive offers from merchants, but then when they are at the point of sale and they are on their apps, they do end up giving up that information.

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