Mobile Payments: The New Reality?


We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Friday, June 28th, 2013

by guest blogger Tara Thwin-Paljor


244.2 million people are projected to use mobile pay this year, according to Gartner, up from 200.8 million in 2012. It seems that more and more consumers see the appeal of using their phone to pay for a range of services.

If you’ve been keeping up-to-date on mobile payments news, you’ll know the latest story – a new start up Clinkle has recently raised $25 million to build a new mobile payments platform.

According to the New York Times, here’s what we know about their platform so far:

  • They intend to make a payment app that works on any smartphone and ties itself to any credit card or bank account. No need for an NFC chip.
  • There is no added hardware merchants have to adopt, which makes the process relatively painless.
  • Right now, they intend to focus on businesses around college campuses to target students who may be more eager to use mobile payment apps.

Clinkle’s main goal is to create a system where people can leave their wallets entirely at home. And although there’s been significant hype about Clinkle and its future, it is just one of many in his rapidly growing market for mobile payments.

Mobile payments have their pros and con. Consumers benefit by having a new, convenient way to pay for services. Businesses benefit by being able to acquire new information from consumers,

On the other hand, because the mobile payments market is still relatively new, consumer protections are still limited and inconsistent. Users may be subject to fraud or security risks when using mobile payments and protections vary depending on the mobile payment method. So while this growing market may be exciting, consumers are urged to be cautious and aware of such risks. For example, the federal laws provide protections from fraud for credit and debit cards, but not prepaid cards – meaning that if your mobile is tied to a debit card, your liability is much more limited. With data sharing and privacy concerns, there is now a call for greater financial regulation.

As Consumers Union continues to investigate consumer protections on mobile payments, we want to hear from you. Have you used mobile payments? If not, why? Share your story.


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