The recommendations were made at a time that smartphone payments systems are still struggling to take off.
A new report from the FTC is recommending that smartphone payments systems offer greater mobile security and transparency in order to increase their appeal to consumers by shrinking one of the largest barriers that is standing in the way of mass adoption.
At the moment, there is no single payments system that is taking a considerable lead among consumers.
Though it is widely believed that giants such as Google Wallet, ISIS, Square, and others will become important players within the next few years, at the moment the concerns that consumers hold regarding mobile security continues to stop them from using these services even once. In this light, the FTC released its report in order to help companies to make using their smartphones as payment devices a more appealing activity for consumers.
The main issue addressed by the FTC report was mobile security, as well as privacy and dispute resolution.
The report was based on data that was collected from an FTC workshop that occurred in April 2012. At that time, the three primary barriers to consumer adoption were identified, with mobile security and privacy leading the way.
Based on an analysis of this information, the recommendation that the FTC has made to all mobile payments companies is to develop a very clear policy for mobile security, which includes the reporting and resolution of all fraudulent transactions and unauthorized charges. The report took into account that the wallet services will allow users to apply numerous payment sources to their accounts.
It explained that “mobile payment users may not recognize that their protections against fraudulent or unauthorized transactions can vary greatly depending on the underlying funding source.” When all is said and done, it is up to the end user to understand the various protections provided by each of the methods he or she is using to make purchases. However, the FTC said that any efforts that can be made to help to make it clearer to users precisely how they are protected in terms of mobile security can be very helpful.