Protecting consumers who use mobile payment systems could be the...

“green” (discussion) paper published in January on credit card, Internet and mobile payments, and the results of its May 4 forum on the issues, he said. It will try to find consensus by stakeholder category and to make public a synthesis of the results and the comments themselves sometime in June, the source said. The paper was the first broader statement on m-payments the EC has made, he noted. While there’s less discussion of mobile payments than of credit cards, that doesn’t mean the issues aren’t important, especially since m-payments are expected to surge in the next two years, he said. The EC plans to unveil its next steps before the end of July, he said. Because the discussion document covers a vast area and the EC can’t address all the issues, the July statement will set some priorities, he said. It remains to be seen if there will be a concrete proposal on m-payments, but what could be of early importance is ensuring that new payment methods fit within EU consumer protection rules, he said. Legislation or non-legislative proposals on m-payments and the other systems discussed in the paper could be adopted next year, he said. The EC considers three aspects of mobile payments key, he said: (1) Whatever systems emerge must serve the interests and requirements of consumers because they're the end-users. (2) The European mobile payment market must be integrated. (3) All incumbents and new entrants must operate under the same conditions. The EC must “operate with a strong degree of caution” because m-payments are such a new market, he said. While everyone acknowledges the need for common technical standards, the question is when they should be adopted and whether they should be set by law or the market, he said. Some want to wait until the market is clearer, while others say waiting too long may make it difficult to develop harmonized technical rules because local or regional solutions may have emerged, he said. The critical thing is to find the right timing, he said. Another important m-payment issue is finding a common business model, the source said. Mobile payments include a broad complex of payment business models. Non-traditional players such as Google’s Android, Apple, mobile network operators and handset makers want a piece of the pie, and it’s not clear how they'll find agreement with traditional players such as banks, he said. Some stakeholders, such as the European Payments Council, think the EC assessment (CD May 15 p8) of the state of m-payments in Europe is pessimistic, he said. Such systems are already a reality and markets are emerging, so the EC’s use of the term “stalemate” in the green paper may have been too strong, he said. But momentum so far hasn’t been strong, he said. The key driver for m-payments will be smartphone penetration, which is rapidly increasing, he said. One key roadblock now is that some technologies, such as near-field communications, aren’t available in current handsets, he said. That seems to be changing, however, he added.