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Fed: Mobile payment systems need to be more secure

July 3, 2012

According to some financial experts, mobile payment systems are not following the same rules as traditional payment providers and may be putting customers at risk.

According to some financial experts, mobile payment systems are not following the same rules as traditional payment providers and may be putting customers at risk.

Nextgov reports that during a recent meeting before lawmakers, the Federal Reserve Board of Governor’s associate general counsel Stephanie Martin said that certain mobile credit card programs may not meet the requirements imposed on traditional credit card terminal systems.

She said that one of the biggest problems came from the fact that regulations had been created prior to the development of the new technology.

“Many of our payments laws were initially drafted long before mobile payments (or the devices that facilitate them) were even envisioned. Therefore, those laws may not be well-tailored to address the full range of mobile payment services in the marketplace,” Martin said a written statement, according to the source.

If businesses fail to protect client data, the government could file a lawsuit. In one recent case, the U.S. Federal Trade Commission said it had filed a case against Wyndham Worldwide after three credit card breaches took place between 2008 and 2009.

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