Canadian Banking Association Releases Voluntary Mobile Payments Guidelines
Mobile payment systems (also known as mobile wallets) are an emerging and exciting technology that could change the way many companies do business and the way that many consumers make purchases. With mobile payment systems, consumers can use their mobile phone to pay for goods and services, rather than traditional cash and credit methods. There are various models of mobile payment systems including direct mobile billing, mobile web payments and near field communication (NFC) which permits consumers to “tap” their phone onto a reader module to make a payment.
While the concept of mobile wallets appears to be primed for take-off, there are a number of logistical, security and privacy considerations that continue to arise. Despite these concerns, financial institutions and payment companies have continued to progress with attempting to bring these technologies to the mainstream. Recently, Mastercard released PayPass Wallet services, an all encompassing service including PayPass online, PayPass Contactless (based on the NFC technology), PayPass Wallet and the PayPass API.
On May 14, 2012, the Canadian Bankers Association (CBA) published the initial version of the Canadian NFC Mobile Payments Reference Model. The Reference Model is a set of voluntary guidelines which are intended to serve as a blueprint for how mobile payment capabilities may be offered in the Canadian market. The hope is that the release of these guidelines will increase user choice and accelerate the adoption of mobile payments.
The guidelines discuss how information will be exchanged among various parties to a transaction, including financial institutions, payment card companies, telecommunication companies and merchants. The guidelines also discuss implementing standards, security matters and the logistics of processing NFC payments.
While voluntary, these guidelines were developed due in part to efforts by the federal government’s Task Force on the Payments System Review in 2011. Therefore, the financial institutions that developed these guidelines will remain committed to the principles contained in the document.
The question does not appear to be if mobile payments are the way of the future, but rather when and how will it be implemented in a manner that will attract mainstream usage. While the CBA guidelines appear to be the first step to wider adoption, consumers may prefer added protection through stricter non-voluntary regulation prior to adopting these technologies as a main method of payment.