Financial Consumer Agency of Canada

Financial Consumer Agency of Canada

December 18, 2013 09:00 ET

Mobile Payments Raise Consumer Protection Questions for Canadians

OTTAWA, ONTARIO--(Marketwired - Dec. 18, 2013) - The introduction of mobile payments (m-payments) into the Canadian marketplace brings both convenience and potential risks for Canadian consumers, according to a research study published today by the Financial Consumer Agency of Canada (FCAC).

In their study entitled Mobile Payments and Consumer Protection in Canada, the authors examined the extent to which financial consumers in Canada are protected when making m-payments and found that consumer protections vary across the Canadian marketplace.

An m-payment is a payment made with a smartphone or other mobile device instead of a more traditional payment method, such as cash or credit or debit card. M-payments are expected to be widely adopted in Canada over the near term. "While m-payments are still evolving and are not yet mainstream, their emergence in the marketplace has triggered important questions related to consumer protection," said Lucie Tedesco, Commissioner of FCAC. "We need to be in front of these issues today so that we understand what is at stake and bring to light the implications for Canadians."

A few highlights from this study:

  • Users of m-payments in Canada are not all protected equally, as consumer protection obligations vary by service provider.

  • Mobile devices represent an opportunity to improve disclosure by informing consumers and seeking consent in real time.

  • M-payment service providers may sell user data to third-party marketers, who then target consumers with advertising based on demographic, behavioural and geographic information. This practice, known as profiling, may provide benefits to consumers, but it may also pose new risks, particularly when products are marketed to vulnerable consumers.

  • The number of stakeholders involved in an m-payment transaction may increase the level of complexity related to dispute resolution and redress. In the event of an error or unfair treatment, a consumer may be unsure as to how or where to file a complaint or obtain redress.

FCAC will leverage the study's findings as they apply to consumer education. It is currently developing information to help consumers understand how m-payments work and what their implications are and it is working to make Canadians more aware of profiling and malware threats and the ways they can best protect themselves.

Mobile Payments and Consumer Protection in Canada is the first report published under FCAC's research mandate. FCAC conducts research and leverages external studies to identify emerging trends and issues, inform program and policy development and equip the Government of Canada with evidence-based ways it can better inform and protect consumers of financial services and products.

About FCAC

With educational materials and interactive tools, FCAC provides objective information about financial products and services to help Canadians increase their financial knowledge and confidence in managing their personal finances. FCAC informs consumers about their rights and responsibilities when dealing with banks and federally regulated trust, loan and insurance companies. FCAC also makes sure that federally regulated financial institutions, payment card network operators and external complaints bodies comply with legislation and industry commitments intended to protect consumers.

You can reach us through FCAC's Consumer Services Centre by calling toll-free 1-866-461-3222 (TTY: 613-947-7771 or 1-866-914-6097) or by visiting our website:

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