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ATM-mobile security and the consumer

ATM-mobile technology doesn't just have to be safe. The customer has to believe it's safe, as well.

July 25, 2013

At September's ATM & Mobile Executive Summit in Washington, D.C., one of the sessions,"Mobile Security Trends and Stats," will address an issue that is vital to the successful deployment of mobile technology. Without security there is no customer confidence, and without customer confidence, there is no uptake.

One of the panelists for the session will be Jim Pitts, project manager of BITS, the technology policy division of the Financial Services Roundtable. FSR is an organization that represents 100 of the largest integrated financial services companies providing banking, insurance, and investment products and services to the American consumer.

In advance of the event, ATM Marketplace asked Pitts to share his thoughts on the future of ATM-mobile convergence from a policy point of view.

Q: Let's start with your role on the Mobile Security Trends and Stats panel at the summit — what will you talk about?

A: BITS has a 2013 Roadmap detailing activities to address financial services priorities in areas of cyber security, top level domains, better regulation and legislation, fraud prevention and emerging technologies.

We've looked at mobile financial services as an important emerging technology. In a member driven project series we've developed a threat assessment tool to help our members assess their services, including a fraud analysis process module which we added this last year.

We've also taken a long look at the mobile eco-system and recently published a perspective on layered security specific to mobile. We're happy to have an opportunity to share these learnings and to exchange ideas at this summit.

Q: In your opinion, what are the biggest challenges facing payments innovation?

A: The velocity of technology innovation and access along with extreme population growth has resulted in the largest, most complex set of payments systems the world has ever experienced. The speed and complexity of change is creating unprecedented challenges. Meanwhile we continue to address traditional challenges and opportunities likewise morphing — competition, crime, economics and regulation.

Q: What role will the government play in the evolving payments market?

Consumer protection and confidence assurance along with promotion of healthy and profitable commerce;
enforcement of law/facilitation of global cooperation;
orderly retirement of obsolete transaction methodologies;
support of private sector solution implementation.

At their recent payments symposium, Federal Reserve System officials announced an effort to look at the payments system from "end-to-end," including regulatory requirements, impact of innovation, and customer needs.

Q: What will the payments landscape look like in three years?

A: Payments will move toward more digital (mobile-centric), more globalized, more accessible and more universal. Attrition will impact less favorable payment types (cost, not driving commerce, consumer preference).

Q: How ready are consumers to drop their wallets in favor of mobile payments?

A: The word "consumers" is not a one-size-fits-all term. Many already have or would immediately if all the holders of wallet real estate (and related stakeholders) would catch up (driver's license, insurance card, vehicle registration, payment cards). At the other end of the spectrum many would argue "Why fix what ain't broke?"

Q: What are the barriers to wider consumer adoption of mobile payments?

There is not universal merchant acceptance;
there is not zero consumer and merchant risk; and
it's still hard to dump the physical wallet.

In the U.S. consumers are very comfortable with a robust array of highly effective payment alternatives. There is no need gap or urgent requirement to use mobile payment technology, so for many it's just a lifestyle choice.

Jim Pitts is project manager of BITS, the technology policy division of the Financial Services Roundtable, an organization that represents 100 of the largest integrated financial services companies providing banking, insurance, and investment products and services to the American consumer. Pitts will be a panelist in Mobile Security Trends and Stats session at the ATM & Mobile Executive Summit in September.