Friday, March 30, 2012

Congress, FTC Look at "Mobile Money"

Though executives at banking and financial services firms, as well as telcos, are well aware of the key role regulators play in shaping their businesses, technology firms, especially software concerns, probably do not fully realize how much regulation ultimately will shape the mobile commerce, mobile payments and mobile wallet businesses.

At the moment, most of the activity consists of efforts by participants to get traction with key stakeholders, early in the creation of what most hope will prove to be large businesses.

At some point, regulation is going to play a bigger role in shaping the fortunes of contestants, though.

"Money" is a highly regulated function, and banking likewise is a business with lots of regulatory context. Some of those rules relate to consumer protection, while many others limit and define the lawful scope of what can be done.

So it is no accident that both Congress held hearings on mobile money in March 2012, while the Senate and Federal Trade Commission also plan their own hearings in April 2012.

“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-W.Va.) during the House Financial Services Committee consumer credit panel’s hearing on The Future of Money.“


The Senate banking committee also 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.


Separately the FTC will hold hearings on April 26, 2012. 


Among the questions are "jurisdiction," as one might argue the Consumer Financial Protection Bureau, the Federal Trade Commission, the Federal Deposit Insurance Corp., the Federal Reserve or  Federal Communications Commission have roles to play. 


Unfortunately, some contestants will wind up finding out that regulatory bodies have imposed rules that make some business plans unworkable, others merely much less profitable. 

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