Originally published in E-Finance & Payments Law & Policy - February 2013.
New payments companies need to be aware of the legal and compliance issues that are part of operating in two of the most heavily regulated US industries: financial services and telecommunications. Getting the legal and regulatory issues wrong can be fatal to a startup’s business model and product offering. Erin Fonté, a Shareholder and Payments Lawyer at Cox Smith Matthews, discusses the fragmented US regulatory landscape surrounding m-payments and the need to bake in compliance from the start.
New offerings for mobile AS point-of-sale (e.g. Square, GoPay by Intuit) and mobile AT point-of-sale (e.g. GoogleWallet, PayPal, Isis), for example, seem to spring up daily. There are at least 40 and as many as 120 different mobile wallets currently in the US alone1. Mobile payments is a hot area for technology start-ups, and venture capital funds have flowed freely to start-ups touting the 'magic bullet' for disrupting the traditional payments networks and potentially making big dollars in the process. The global value of mobile payment transactions is predicted to reach $1 trillion by 20172, and lots of time, energy and money is being spent chasing a piece of the mobile payments pie.
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