The growth of the mobile payment device as a platform for electronic financial services points to increased regulations designed to address the allocation of risks between those who process and facilitate such transactions and those who benefit from them. At present, legal responsibility for mistaken, unauthorized, and failed mobile payment transactions is “up in the air,” which may be hindering broad acceptance of electronic technologies for consumer financial transactions.
Consumers are demanding the convenience of mobile payments but want the assurance that they will be as protected in their smartphone transactions as when using credit cards. However, existing legal rules don’t yet address questions such as who is liable when security and privacy are breached in mobile payment transactions; who owns the consumer data that passes through the payment platforms and how can it be used; who is responsible for legal disclosures to consumers; how consumers will gain access to their funds when systems fail; and other key concerns.
Federal and state regulators can be expected to focus on these and other issues as the mobile payment industry matures. In this article which first appeared in “Payments Journal,” Margo Tank and David Whitaker, noted e-commerce and consumer finance lawyers with BuckleySandler LLP, identify key legal questions facing the mobile payments industry and its providers and intermediaries.
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