By Megan R. Wilson - 12/05/13 06:00 AM EST
Major banks and credit card companies are launching a new lobbying effort to ensure that the booming business of mobile phone transactions isn’t thwarted by regulations.
Household names like MasterCard, Wells Fargo, AT&T, Verizon and PayPal are part of the Electronic Transactions Association (ETA), a group formed in the 1990s that is now seeking to become a major player on Capitol Hill.
“Since change and innovation doesn’t come, of course, without growing pains, rapid innovation can lead to increased scrutiny from regulators and lawmakers,” said Jason Oxman, the group’s chief executive.
“To date, we don’t have to deal with any specific laws or regulations that apply to mobile payments and we would like, for the purposes of fostering innovation, to keep it that way.”
The ETA is trying to impress upon lawmakers the huge role that electronic transactions play in the economy.
Consumers make about $4.6 trillion in electronic purchases each year through card swipes and online purchases. On Cyber Monday alone, $2.5 billion in electronic payments flowed to Internet retailers.
“It’s not exaggerating to say that no retail business would happen if not for our industry,” Oxman said.
Rep. Shelley Moore Capito (R-W.Va.) spoke at the group’s Tuesday lunch, which was attended by the ETA’s member companies, lobbyists and congressional staffers. Representatives from MasterCard, Intuit, PayPal and Verizon spoke about new technologies and efforts to get ahead of potentially harmful regulations.
“This is a topic that is fascinating to me,” Capito said. “When I was in college [ATMs were] just coming in — and you were scared. You thought there was a little person back there, shoving the money out. … What we’re doing now is almost sci-fi. … George Jetson probably had some of these devices when I was watching cartoons growing up.”
As the chairwoman of the House Financial Services subcommittee on Financial Institutions and Consumer Credit, Capito has already held two hearings exploring how mobile payments work and what regulations are in place.
Capito said those hearings have helped ease her concerns about consumer privacy and data security, and she plans to hold more of them in 2014. She said the industry needs to “keep Congress in the loop” as payment technology evolves.
That’s exactly what Oxman intends to do.
The ETA also met Tuesday with House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and touched base with the administration by visiting the Federal Trade Commission.
During the meetings, ETA officials highlighted member companies that process credit card transactions for merchants such as Global Payments, TSYS, Intuit and Vantiv. Each company has billions in revenue while operating largely behind the scenes.
The developing world of mobile payments has yet to face a major test from Congress or regulators, but Oxman said the industry is already subject to a thorough regulatory regime.
“When you talk about moving people’s money around, there’s a lot of regulation involved. There are 20 federal agencies regulate the payments and financial services industries,” he said. “Add to that regulations and laws in the 50 states … and it is a patchwork of very significant and very heavy regulation.”