1. Mobile Payments and the FTC Manas Mohapatra Director of Mobile Policy Mobile Technology Unit Federal Trade Commission The views expressed are not necessarily those of the Commission or any individual Commissioner. 1

2. 2 Mobile Technology Unit Policy initiatives Law enforcement actions

3. Section 5 of the Federal Trade Commission Act broadly prohibits unfair or deceptive acts or practices in or affecting commerce. Deception a material representation or omission that is likely to mislead consumers acting reasonably under the circumstances. Unfairness practices that cause or are likely to cause substantial injury to consumers that are not outweighed by countervailing benefits to consumers or competition and are not reasonably avoidable by consumers. Flexible law that can be applied to many different situations, entities, and technologies. 3

4. Reverb (Online Endorsements) Acne Apps (Ad Substantiation for Health Claims) W3 Innovations (COPPA) Frostwire (Mobile Peer-to-Peer File Sharing) Mobile background screeners letters (FCRA) Google (Final Consent Order) Facebook (Proposed Consent Order) 4

5. 5 Past Workshops: Town Hall: Pay on the Go - Consumers & Contactless Payment (2008) Introduction to Contactless Payment: What it Is and How it Is Used Consumer Understanding and Acceptance of Contactless Payment Technology Contactless Payment Cards & Mobile Payment Devices Transatlantic RFID Workshop on Consumer Privacy and Data Security (2008) RFID in Contactless Payment Systems

6. 6 Mobile phones are changing the way consumers make payments. Perceptions of limited usefulness and concerns about security are holding back the adoption of mobile financial services. The underbanked make significant use of mobile financial services.

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8. 8 Mobile Payments: The Present and the Future Opportunities and Challenges for Businesses and Consumers Legal Landscape and Dispute Resolution Drilling Down: Fraud Mitigation and Data Security Drilling Down: Privacy Issues

9. 9 Privacy Issues What information is being collected about consumers? New information flows from traditional payment methods How is that information being used and who is it being shared with? Are consumers being informed adequately?

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11. 11 Source: A Snapshot of Select Mobile Payment Providers Disclosures – FTC Staffs Preliminary Observations, Slide 13, April 26 2012. 8 of the 19 companies reviewed by FTC staff stated that they send aggregate information to third-party advertisers Many companies had statements about who they would share consumers personal information with. Examples of statements about when a company may disclose or provide personal information: to perform business support functions on our behalf for the purposes of... improving the user experience "to companies that provide services to help us with our business activities such as shipping your order or offering customer service. to strategic partners... that help... market to customers. with... trusted third parties, to ensure that you have a safe, high- performance experience

12. 12 Privacy Issues The risks to privacy are heightened in the mobile payments space. Collection of sensitive information – SSNs data from credit reporting agencies location information consumers purchases over time.

13. 13 Privacy Issues Collection and storage of personal data poses risks that the information will be used for unintended purposes or fall into the wrong hands. Companies that collect data should minimize risks by following three basic principles – privacy by design, choice for uses beyond the context of the transaction, and transparency. FTC Privacy Report 2012.

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