Consumer protection aspects of mobile payments

Over the next few years, mobile commerce in Europe is expected to grow at an average compound annual rate of 42%. The way in which consumers purchase goods and services is changing significantly as new technologies permit the development of an increasing number of cashless payment solutions. There are various forms of mobile payment (payment, for which the payment data and the payment instruction is initiated, transmitted or confirmed via a mobile phone or device). They include payments via SMS, direct billing (by adding the payment to the monthly mobile phone bill), mobile web payments (using a credit/debit card or pre-registration at an online payment provider), and Near Field Communication (NFC). However some of the challenges to consumer protection, such as lack of interoperability between mobile payment options, personal data protection, digital identity theft and fraud, prevent greater consumer take-up of mobile payments. Unfair commercial practices in e-commerce relevant to mobile payments include misleading advertising, hidden payment obligation and IP tracking. Other consumer protection issues are dormant assets, lack of accessibility and readability of payment-related information, and concerns related to vulnerable consumers. While the current legislative framework is undergoing revision as a result of the European Commission's new proposal for a Directive on payment services in the internal market, some stakeholders voice concerns.