FSTC Launches Mobile Technology Initiative

More than 25 organizations from banking, wireless carriers and technology providers are participating to provide a broad view of the current environment and best practices. Other organizations are encouraged to join. The initiative is sponsored by The Federal Reserve Bank of Boston and The Clearing House Payments Company L.L.C. as well as the American Bankers Association, BITS Financial Services Roundtable, NACHA—The Electronic Payments Association, and PaymentsNation. The FSTC has engaged KPMG to provide project management.

“We’re evaluating what’s out there today to see where there are common practices and differences,” said Jim Pitts, FSTC Managing Executive of Payments. “We’ll use our findings to develop an interoperable model for all mobile payments participants.”

Interoperability is essential to realize the promise of mobile payments, which is for a customer to be able to make a payment from any bank, on any mobile phone, using any carrier.

“Many banks, wireless networks, handset manufacturers are involved in pilots or early roll-outs, which provides a rich source of information,” said Pitts. “However, at some point, the systems will have to work well together for mobile payments to succeed as a major payments channel.”

“This initiative will play an important role in identifying and documenting the technology that will enable banks to meet growing customer demand for mobile payments,” said Janey A. Place, Ph.D., CEO of DigitalThinking, a business strategy, technology, innovation and payment systems consulting company. “Open and efficient communications networks have created significant benefits for consumers, commerce and the national economy.”

The group expects to recommend a preferred technology standard for interoperability by year’s end.