Carrier Executives Point to Possible Mobile Payments Rapprochement
SAN FRANCISCO -- Representatives of carriers from competing mobile-payments alliances said Tuesday their conflict could be solved some time. “There’s an opportunity for Google Wallet and Isis to play nice in this space and work together to make it even more successful,” said Paul Boyer, legal-affairs director of T-Mobile USA, a member of Isis along with Verizon Wireless, AT&T, the four largest credit-card companies and others. On a Law Seminars International program, he added, “I'd like to see that. … We'd love to see Sprint … or U.S. Cellular or all of the 26 other carriers in the U.S.” come aboard.
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"You could see Sprint enable an Isis solution as well as a Google solution and other solutions,” said Chris Bierbaum, a product development manager who leads Sprint’s mobile commerce and payments efforts. An alliance of the carrier and Google Wallet has gotten out into the payments business ahead of Isis. Sprint dropped out of Isis over a difference in approach, but Isis has since made encouraging changes, he said.
Tony Balloon of the Alston & Bird law firm said uncertainty over which players in the mobile-payments universe fall under which financial regulations, has held progress back in the U.S., especially compared with east Asian countries. There are “lots of questions, not a lot of answers,” he said. “The government’s been reluctant to weigh in. … You're going to see a lot of lobbying around this” at agencies including the FCC, FTC and Federal Reserve.
But Balloon said later that financial institutions are satisfied with applying the regulation they're used to, and telcos are content with operating under the FCC’s truth-in-billing rules. Mobile payment service providers like PayPal and Square have the highest uncertainty, but, unlike start-ups, PayPal has the resources to play it safe by complying with financial rules even without being sure they apply, he said. In any case, carriers may end up being subject to a new alphabet soup of financial regulations, he said.
Other speakers disputed any regulatory vacuum, at least when it comes to systems using near field communication. “The regulatory requirements are clear,” because in effect the systems simply put familiar payment cards into smartphones, the type of account determining the government and industry rules that apply in a particular case, said Dax Hansen of the Perkins Coie law firm. “You don’t need any new laws.” There aren’t “regulatory concerns or regulatory uncertainty that’s been a barrier here,” Boyer agreed. The obstacle has been a “chicken-and-egg” problem of getting consumers and all the industries involved to make the major investments required to buy into a new way to pay, he said. “The regulatory issues … are not all that significant,” Boyer said. “All we're doing is offering a different form factor for the payment card.”