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San Francisco, CA – Today, the California Public Interest Research Group Education Fund (CALPIRG Education Fund) released a new report titled, “The Future is Calling: A Consumer Guide to Mobile Payment Systems.” The report explains how this new technology works and provides consumers with the information they need to best utilize mobile payment systems in a safe and secure way. The report also includes recommendations on how policymakers and businesses could strengthen consumer protections in the future.
“Consumers are now able to pay with their mobile phones at an increasing number of stores,” said Jon Fox, CALPIRG Education Fund’s consumer advocate. “But with this expanded ability comes expanded risk. Our report explains the simple steps consumers can take to keep their finances safe using mobile payments.”
Consumers today are more familiar with protections for a variety of the traditional payment options, like credit cards, debit cards, checks, and cash. But as is the case with many new products, the development of mobile payment technology has outpaced the law. To allow consumers to make smarter financial choices, we must provide consumers with access to the information necessary to make smart financial choices.
The introduction of mobile payment systems is a paradigm shift, with these new payment systems challenging our old regulatory frameworks. For mobile payments to work for consumers, we must understand the true liabilities surrounding them and learn the proper ways to keep our finances safe and secure. With the looming threat of fraud and financial theft, this new report clarifies how to: determine whether payments are secure, dispute a charge made using mobile payment systems, and review the state of consumer privacy with mobile payment apps.
“Our report found that while mobile payment technology is safer in terms of identity theft and fraud, there are serious privacy concerns in regard to the data generated while shopping on your phone,” warned Jon Fox, adding that “mobile payment systems should find the right balance between privacy and convenience.”
To best protect ourselves, CALPIRG Education Fund recommends that consumers follow these rules when using mobile payment apps:
- Associate credit cards with mobile payment apps to ensure the highest level of financial protection.
- Alternatively, consider loading a pre-paid debit card with limited funds for small purchases.
- Remember to enable password protection on your mobile device, especially for all financial apps.
- Bring disputed charges and other complaints to the attention of your card issuer as you would with normal use of your credit or debit card.
- If your device with a mobile payment app is lost or stolen, immediately contact your mobile payment service provider to disable the app to prevent unauthorized access.
- To protect your privacy, be aware that others may learn of what you are buying and how you pay for it. Remember mobile payments (like most non-cash transactions) are tracked and monitored.
“Within most mobile wallet apps, consumers can easily select different cards for different transactions, maximizing rewards or favorable interest rates even if they forget the physical card at home,” noted Jon Fox. “Mobile payments made using a credit or debit card account retain the same level of consumer protections already associated with those cards, so consumers can feel just as confident shopping with them.”
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The California Public Interest Research Group Education Fund conducts research and public education on behalf of consumers and the public interest. Our research, analysis, reports and outreach serve as counterweights to the influence of powerful special interests that threaten our health, safety and wellbeing.
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