WASHINGTON -- The National Retail Federation (NRF) has urged the Federal Trade Commission (FTC) to "move cautiously" as it develops regulations for mobile payments, advising that any new rules parallel those for the underlying form of payment and not be specific to the technology.
The primary reason being that mobile technology and processes are just beginning to emerge and no one knows which practices the public will like or what methods will provide new benefits, said Mallory Duncan, senior vice president and general counsel for NRF, Washington, D.C.
"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," Duncan said. "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."
He said the public very often embraces change as the future becomes "now," noting that a phone itself is "just a device, not a payment," and that actual payment could take place via a credit or debit card, directly from a bank account, be processed through the user's phone bill or be made through other means. Any privacy rules developed for mobile payments should be no more restrictive than those for the underlying form of payment, he said.
One concern is that new regulation may negatively affect loyalty efforts and strategies to build customer databases.
"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 know their customers more like they knew their customers generations ago, and offer more personalized service."
Duncan said federal officials need to address a number of issues including a definition of what constitutes a mobile payment. While the term is largely used to mean a payment made in a bricks-and-mortar store using a smartphone, officials need to decide whether a payment made for an online purchase on the same device constitutes a mobile payment, or if payments made on a portable device like an iPad tablet or a laptop computer are "mobile."
As one of the world's largest retail trade associations, NRF represents retailers and industry partners from the United States and more than 45 countries abroad. Retailers operate more than 3.6 million U.S. establishments that support one in four U.S. jobs--42 million working Americans. Contributing $2.5 trillion to annual gross domestic product, retail is a daily barometer for the nation's economy, the association said.
(For more on how mobile payment will affect the c-store industry, watch out for the special technology supplement in the May issue of CSP magazine.)
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