Tag: Consumer Financial Protection Bureau

Apple’s mobile payments service has already had a major impact

Apple Pay has managed to find success where other services have failed

Apple Pay has been finding significant success as a mobile payments service in the few months since its launch, but the service could face challenges in the future. When Apple launched its payment service in September of this year, many believed that it would be a game changer in the mobile commerce space. The service launched with the support of several major retail companies and financial institutions and has been gaining more support from these sectors since.

Report shows that mobile payments among iOS users is rising dramatically

A recent report released by Investment Technology Group found that Apple Pay has already had a significant impact. The report shows that 60% of new Apple Pay users made a payment through the service multiple times during November, suggesting that the platform is engaging consumers effectively. By comparison, 20% of new PayPal customers used the company’s service during the same period.  The report also shows that Apple Pay customers used the service approximately 1.4 times per week.

Consumers are likely to continue using Apple Pay with merchants they already purchase products from

mobile payments - apple payThe retail partners that Apple has acquired for the launch of Apple Pay have helped the service flourish. Those with iOS devices have been without a comprehensive mobile payments solution for some time, and many were happy to use Apple Pay when it was launched in September. The report from Investment Technology Group shows that Apple Pay users were more likely to continue using the service with the same retailers numerous times, with 66% of consumers using the service at the same merchant for future transactions.

 Mobile payments is coming under regulatory scrutiny

Despite the success of Apple Pay, it could be subject to restrictive financial regulations in the future. Apple may be subject to examination by the Consumer Financial Protection Bureau, which has grown somewhat concerned about the mobile payments space recently. While the agency has not yet taken steps to examine companies like Apple and determine whether or not they must comply with the Consumer Financial Protection Act, mobile payments have been falling under more regulatory scrutiny recently.

Mobile payments face more scrutiny due to lawsuit against Sprint

Consumer Financial Protection Bureau files a lawsuit against Sprint

The Consumer Financial Protection Bureau has announced that it has filed a lawsuit against Sprint, one of the largest telecommunications companies in the United States. The lawsuit accuses the company of illegally processing charges through a third party. This marks the first time that the agency has pursued legal action against a telecommunications company and the lawsuit is also bringing more scrutiny to the mobile payments space.

Mobile payments are becoming more favored among consumers that need to pay their bills

Mobile payments have become quite common among consumers. Many people are opting to pay their phone bills and other charges with their mobile devices rather than pay these charges on a home computer. The agency claims that Sprint has allowed third party vendors to place “tens of millions of dollars” in illegal charges. The agency also suggests that Sprint has ignored consumer complaints regarding the matter, collecting money from third party vendors without cause. The Consumer Financial Protection Bureau is now seeking court approval to force Sprint to refund money to consumers and pay fines associated with its alleged actions.

Sprint may not have properly monitored its third party vendors from 2004 to 2013

Mobile Payments - LawsuitAccording to the federal agency, from 2004 to 2013, Sprint outsourced payment processing for digital purchases, such as games and other mobile applications. The agency claims that many consumers were not aware that they would have to pay for these applications because of hidden charges. Sprint is accused of failing to properly monitor its third party vendors and stop them from charging consumers over their mobile devices.

Mobile commerce is falling under more scrutiny due to the actions of third party merchants

The mobile commerce space may face more scrutiny from government agencies, depending on how the lawsuit plays out. Potentially malicious activities from some online vendors has shown the need for more regulation in the mobile payments sector. Because mobile commerce is still so new, federal lawmakers have had trouble forming regulations and standards that would govern this emerging market.