Just over a year ago, I wrote a post raising the question of which stakeholder or stakeholders in the payments ecosystem had the responsibility for educating consumers regarding payments security. As new payment technologies such as mobile devices, wearables, and the Internet of things gain acceptance and increased usage, who is stepping up not only to teach consumers how to use the devices but also how to do so in a safe and secure manner?
Since it is generally financial institutions that have the greatest financial risk for payment transactions because of the protective liability legislation that exists in the United States, this responsibility has fallen largely to them. However, this educational effort has become increasingly difficult since consumers generally acquire these new products at retail outlets or mobile carrier stores, where the financial institution has no direct contact with the consumer.
The Consumer Federation of America (CFA) recently continued its ongoing efforts to provide educational information to consumers with the release of a guide to mobile payments. The guide is comprehensive, covering issues such as privacy, security of the mobile device, the dangers of malware, error resolution, and dispute procedures for mobile payments, and concludes with a humorous animated video that recaps some of the risks with mobile phones if they are not secured and used properly.
As an example, in its section on privacy, the guide offers the following tips:
- Read the privacy policies of the companies whose services you are using to make mobile payments and the companies that you are paying.
- If you don't like a company's privacy policy, take your business elsewhere.
- Don't voluntarily provide information that is not necessary to use a product or service or make a payment.
- Take advantage of the controls that you may be given over the collection and use of your personal information.
- Since mobile payments, like all electronic payments, leave a trail, if there are transactions that you would prefer to make anonymously, pay with cash.
Kudos to the CFA for its work on this effort. I hope you will read the guide and spread the word about the availability of this valuable resource. It is through the combined efforts of the payments stakeholders that we can work to improve the knowledge level of all parties involved and promote secure usage.
By David Lott, a payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed