CTIA releases guidelines for mobile financial service providers

By Giselle Tsirulnik

February 24, 2009

No funny money

CTIA, in association with the leading U.S. wireless carriers, has developed best practices and guidelines for mobile financial services.

The purpose of the guidelines is to promote clear and rewarding consumer experiences, establish an environment where mobile financial services transactions are authorized, secure and compliant with applicable laws and industry guidelines, and to protect user privacy and financial data, per the CTIA, Washington.

"Mobile financial services providers should use methods consistent with industry best practices to authenticate user identity and obtain user authorization for mobile banking and mobile payment transactions," the guidelines say.

Providers of mobile financial services should offer controls that allow users the ability to receive banking and payment alerts and notices in accordance with user preference.

Also, they should provide systems that allow users to access transaction records and other information about their accounts, according to the CTIA's guidelines.

Providers of mobile payment systems should disclose all material information regarding the liability, if any, that the user may have for unauthorized transactions or fraudulent use.

Mobile payment systems providers should create policies that cap liability for unauthorized transactions.

"Such policies should, at a minimum, comply with liability caps required under existing legal requirements," the guidelines say.

An example of that is a $50 or other applicable liability cap for unauthorized credit card transactions or electronic funds transfers.

Mobile financial services providers should consider incorporating controls that limit financial risk to the consumer, such as usage caps and spending limits.

"It is also important to disclose, in a clear and conspicuous manner, the material terms of each purchase, including a description of the product or service being purchased, taxes, surcharges, and other fees, and refund policies," the guidelines say.

"This may include disclosures off of the mobile device," the document says.
 
Providers or mobile financial services should obtain user authorization for purchases, consistent with industry best practices. They should make receipts or proofs of purchase available for mobile purchases.

Systems that allow users to access order status and other information about their accounts are also important.

The appropriate methods of presenting such information, such as via an SMS message, email, on a Web site, on the mobile service bill or a paper receipt, and the level of information available will vary depending upon the type of service.

Mobile financial service providers should also disclose, in a clear and conspicuous manner, the material terms of mobile coupons, rebates, loyalty programs and similar products.

"Such terms include redemption values, expiratio