Mobile payment systems have been rapidly developing, as “open wallets” emerge in the form of PayPal’s Here card reader for smartphones and Google Wallet.
Representatives from several groups, including the Federal Reserve Bank of Atlanta, the Smart Card Alliance, the Consumers Union, MasterCard and PCI Security Standards, served as panel speakers at the hearing.
Chairwoman Shelley Moore Capito of the Subcommittee on Financial Institutions and Consumer Credit spoke to the emerging trend of mobile payments and its effect on traditional banking.
“We are, I think, on a precipice of a fundamental change in the way money is exchanged between consumers and businesses,” Capito said.
Some market experts estimate that the mobile payment industry could generate $215 billion by the year 2015. Approximately 43 million Americans use mobile financial services and payments as an alternative to traditional banking.
Though many lawmakers expressed confidence in the emerging payment systems, some voiced concern regarding consumer security and fraud issues. Google recently pulled Google Wallet technology after researchers discovered a means of hacking consumer financial information through PIN numbers.
Troy Leach, the CTO for PCI Security Standards Council, said that the organization is responsible for establishing security standards for the payments industry and has already established some standards for mobile payments. Leach added that the council will continue to address security issues in mobile payment technologies as the industry develops even further.
“As payment security is a shared responsibility, all parties of the payment chain must work together in this effort,” Leach said. “Technologies are emerging that have the ability to eliminate card data from potentially insecure mobile environments. The Council has already harnessed some of these technologies to address this dynamic environment, and we will continue to assess, develop standards and guidance around them moving forward.”