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How Will the Government Handle Mobile Payments?

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How Will the Government Handle Mobile Payments?

It's never too early for an iPHone 5 rumor is it?

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With so many reports on "wave-and-pay" mobile phone payments, it was only a matter of time before the government would have to figure out which agency would regulate the transactions.

It's not as easy as it sounds. Mobile payments can cross several agencies including the "Federal Reserve Board, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency and other agencies (that) regulate banking," according to Politico.

However, if viewing a mobile phone as simply a wireless device, then it would be governed by the Federal Communications Commission -- but the Federal Trade Commission also protects the public from fraud and privacy violations. Apparently a group of concerned Federal Reserve bank have been meeting over the last year and a half and are advising the government to clarify which agency should handle this new currency.

Mobile payments have gained traction in the last year,  with both Android and Apple iOS platforms rumored to be developing the digital systems. Last month, Bloomberg Businessweek reported that Google will pay for the installation of thousands of VeriFone Systems Inc. cash registers, which would allow customers to tap or move phones within four inches of the register to pay for purchases. Apple is also reportedly working on the wave-and-pay technology, called near-field communication.

However, government employees are not the only ones seeking answers,  public advocacy groups also want some regulation clarity. They want both legislators and regulators to ensure mobile payments are protected, much like credit card purchases, so users can dispute charges or report fraud.

I'd like to think this would have been all ironed out before the first of the mobile payment handhelds are rolled out, but the government is moving glacially on this issue. So before you rush to "wave-and-pay," please think about the risks you can face: no consumer protection, no charge disputes and no freedom from unreasonable fees.

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