Slide 1

Emerging Risk Forum
“Cash, Check, or Cell Phone?”
Protecting Consumers in a Mobile Finance World

The Mobile Payments Landscape

Marianne Crowe
Federal Reserve Bank of Boston
February 23, 2010

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International Mobile Payment Applications in Developing Countries

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Mobile Money P2P Application in Kenya

Chart showing customers can send money to any mobile user

  1. Customer #1 gives agent cash to load onto phone
  2. Agent loads e-money onto customer #1's phone
  3. Cutomer #1 sends e-money to customer #2 using recipient's phone number
  4. Confirmation text messages sent to both parties to confirm transaction

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Regulatory Oversight for Mobile Payments in Developing Countries

*Above examples highlight need for banks to work with MNOs in developing countries to add their financial services skills, experience & risk/compliance expertise

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International Mobile Payment Applications in Developed Countries

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Mobile NFC Retail Payments in Japan

Source: various studies, according to Innovasia Research, December 2009

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U.S. Mobile Payment Landscape

Consumer demand for mobile payments is low, by percent
Category 2009 2008
Bank Account Adopters 93 93.8
Mobile Banking Adopters 10.2 8.2
  Used mobile banking last 12 months 8.9 n.a.
Cell Phone Adopters 89.51 n.a.
  Mobile Payment Adopters 3.0 n.a.
    Paid using SMS/Text (before Haiti Eartdquake) 2.0 n.a.
    Paid via contactless mobile 1.1 n.a.

1. Consistent with industry estimates of mobile phone subscribers by household. Return to table

FRBB SCPC Survey of Consumer Payment Choice
Conducted Nov/Dec. 2009. 2000+ respondents.
Preliminary and unofficial statistics, subject to revision

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U.S. Mobile Payment Landscape

Why U.S. may ‘lag behind’ with NFC mobile payment adoption

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U.S. Mobile Payment Landscape

Supply–side issues also create barriers to NFC Mobile Payments

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U.S. Mobile Payment Landscape involves many stakeholders

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What needs to be done to develop Mobile Payments in the U.S.?

Bring stakeholders together in a neutral environment to discuss and resolve issues

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What needs to be done to develop Mobile Payments in the U.S.?

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TSM role in Mobile Payments with flow chart

TSM Benefits

Flow chart that identifies the TSM role in Mobile Payments

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Does the legal framework need to be adapted for mobile payments?

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Where is oversight needed?

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Why the Fed cares about Mobile Payments

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Current Fed activities related to Mobile Payments