It's been a wild few weeks in the world of mobile payments. There was the headline-grabbing announcement from a group of retailers including Wal-mart, Target and 7-11 that they are forming the Merchant Customer Exchange (MCX), a consortium focused on creating a new mobile commerce platform. Last week's partnership announcement between mobile payments vendor Square and Starbucks, if not an out-and-out bombshell, certainly a significant salvo in what is shaping up to be a pitched battle among a variety of aggressive and tech-savvy players -- including banks -- for mobile payments dominance.
The big question continues to be: Where will banks fit into the mobile payments landscape? Will they be leaders and standards setters or followers? Will they benefit from the turf battles among non-financial services players, or be swept into the fray with them? Who will call the shots -- technology companies, consumers, payments processors, telecoms, or financial institutions?
Somewhat absent from the debate around the future of mobile payments have been regulators, but it looks like that is starting to change. Not only has the Consumer Financial Protection Bureau signaled its intent to investigate the new mobile payments offerings and companies, but the Federal Reserve Bank has gotten involved. TheMobile Payments Industry Workgroup (MPIW), recently convened by the Fed, contributed to a report that was recently issued by the Federal Reserve Banks of Boston and Atlanta examining the potential gaps in U.S. laws and regulations governing mobile payments. According to a press release from the Boston Fed, "The MPIW is currently developing strategies for sharing information about opportunities and challenges within the mobile payments 'ecosystem.' In this way the MPIW hopes to inform rule-making, encourage collaboration that leads to consistent and effective guidance on mobile payments, address current confusion, and create a framework for potential changes."
So, the Wild West of mobile payments may soon be tamed -- if not by competition, then by regulation. Whether that will be good or bad for banks remains to be seen. But it's never too early to stake a claim.