A House sub-committee recently held a hearing regarding the future of mobile payments and it’s become apparent that a divide exists between those that want regulations designed which treats banks and non-bank entities equally and another that is concerned that Congress will go overboard with the regulations and end innovation.

As American Banker explained, the latter group is represented by the trade group, Electronic Transactions Association, whose members include “payment firms, but not banks in their role as issuers of credit and debit cards.”
"What we're concerned about is that some entities who view the advent of mobile payments as a threat to their incumbent advantage might call for unnecessary regulation," said Jason Oxman, chief executive officer of the Electronic Transactions Association.

The banks released a statement that expressed concern regarding non-bank entities and their lower threshold of regulation, compared to banks.  They are not subject to the same functional regulation that applies to depository institutions, they are considered 'shadow payments providers,'" the Clearing House Association said.

What’s clear is that these are two very powerful groups and that will pull out all the stops to ensure that any resulting regulations will favor their industry.

There were no specific proposed regulations discussed at the hearing.  It was a general fact-gathering meeting, but expect talk of regulation to increase as mobile payments in the U.S. become more of a reality.