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With mobile payments options on the rise, the Federal Trade Commission compiled a report on the state of the mobile commerce and its potential pit falls. One study showed that by 2015, less than two years from today, mobile payments will “achieve widespread mainstream consumer adoption.” With that anticipation, transaction processors and carriers, like Visa, Mastercard, AT&T, Verizon, T-Mobile, Google and Intuit are ramping up for huge growth in this market.  We’ve seen the rise of start ups like Square make accepting transactions on the go more main stream, the FTC says there will be plenty more players entering the mobile payment market as usage expands.

One study by the Federal Reserve found that 87 percent of the U.S. owns a mobile phone, with 44 percent of those owning smartphones. Of that number, only 12 percent in the past 12 months have used mobile payments, and most of those transactions took the form of online bill payment. According to the same survey, the slow adoption rate is blamed on security issues.

The FTC looked at the next mobile payment trend, NFC payments, mobile apps (Amazon, iTunes, Starbucks), online wallets, and mobile carrier billing. While most respondents touted the convenience factors, and businesses hoping for lower processing charges, the FTC expressed concerns about dispute resolution, data security and privacy. The FTC has specific liability regulations on fraudulent credit card charges ($50 if reported within two days, $500 if reported after two days), but those rules do not apply to debit card transactions and reloadable cards (Visa pre-paid cards), meaning your liability is potentially unlimited. Thus, the FTC recommends having mobile payment options tied to a credit card versus any other type of account.

The FTC also warns of “cramming” on mobile carrier billing. Cramming began as a practice of third parties placing fraudulent charges on landlines, and is quickly growing on mobile lines. These transaction are not covered by the FTC but rather fall under the regulation of the Federal Communications Commission. To date, no protection, or liability exists when using this payment option. The FTC gives a long list of to-do’s to the FCC on how to protect consumers, which includes a lot more diligence on the part of carriers (today, the responsibility falls entirely on consumers).

Mobile payment growth seems unstoppable, while it seems more convenient, and at this point it appears to be slightly riskier than “traditional” forms of payment. The FTC is working to improve regulation so that we all can pay with convenience and added protection, but until then pay attention to your statements and be even more diligent when it comes to paying with your phone.