Mobile payment security and consumer protection is front and centre in a new report issued by the Financial Consumer Agency of Canada (FCAC), a consumers rights branch of the federal government.
The report, Mobile Payments and Consumer Protection in Canada, brings to light many potential issues with the disparate implementation of upcoming mobile payment programs, claiming that between the various financial institutions and mobile operators there are large operational areas that are unregulated.
For example, the report lights concern about NFC-based payments, as payment credentials like credit card numbers and PIN codes are stored in secure elements within the SIM card, but there are no regulated standards on how to ensure their safety.
Perhaps even more concerning is the ever-present threat of malware, as there are few areas in which Canadian consumers are protected by data theft on mobile devices. The report claims that upcoming changes to the Competition Act will add anti-spam regulations, but in the meantime service providers and banks implementing mobile payment technologies must provide a more comprehensive mechanism for consumer education.
The report comes at a time when mobile payments, or “m-payments” for short, are on the cusp of wide adoption. Rogers and Bell have both planted their feet firmly in the category, partnering with CIBC and RBC respectively, with plans for wider national launches next year. Both providers are piloting NFC-based payment systems, which limits their use to Android and BlackBerry smartphones, but are expected to adopt a Bluetooth 4.0-based solution in the coming years to take advantage of Apple’s iPhone.