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FTC Should Move Cautiously on Mobile Payments, NRF Urges

2 May, 2012 By: Jackie Jones

WASHINGTON – The National Retail Federation (NRF) has urged the Federal Trade Commission (FTC) to move cautiously when establishing regulations for mobile payments, according to an official statement from the group.

Any rules that are adopted should not be specific to the mobile technology, and should instead parallel those for the underlying form of payment, the NRF said.

“Mobile technology and processes are just beginning to emerge and we won’t know which practices the public will like or what methods will provide new benefits until the technology begins to coalesce,” said Mallory Duncan, NRF senior vice president and general counsel. “The government should not impose regulations that would forestall yet-to-be imagined advances and innovation in order to avoid potential ‘harm’ based largely on speculation.”

“Some of the best innovations on the Internet today might have been suspect a generation ago, but today they are benefits few consumers would want to live without,” Duncan added. “They public very often embraces change as the ‘future’ becomes ‘now.’ Familiarity breeds content.”

Federal officials need to address the definition of what constitutes a mobile payment, Duncan said. A phone itself is just a device, not a form of payment, such as a credit or debit card, and any privacy rules developed for mobile payments should be no more restrictive than those for the underlying form of payment, according to the NRF.

“Retailers have always wanted to know their customers so they can serve them better, and that doesn’t change simply because the method of payment changes,” Duncan said. “Mobile might help retailers get to known their customers more like they knew their customers a generation ago, and offer more personalized service.”

The past year has seen the increasing emergence of mobile within the industry. As more consumers upgrade their mobile devices to smartphones and an increasing number of retailers subsequently launch mobile sites and apps, M-commerce sales continue to spike, according to multiple reports and data (Response This Week, Jan. 11). U.S. mobile commerce sales soared a shocking 91.4 percent to reach $6.7 billion in 2011, and continued growth is expected to boost sales to $31 billion in 2015, according to an eMarketer study earlier this year.

“To keep up with consumer expectations, retailers are bolstering their mobile offerings,” said Jeffrey Grau, eMarketer principal analyst and author of the report, “U.S. Mobile Commerce Forecast: Capitalizing on Consumers’ Urgent Needs.” “Retailers were slow to react to consumer interest in mobile shopping. But now they are making great strides in launching mobile websites and apps.”

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