Banks and mobile phone networks are trialling the use of phones
as replacements for payment cards. They are being used as
'contactless' payment systems, meaning that they can be swiped over
sensors and phone bill credit used to pay for items.
The Government has said that it has addressed its concerns about
abuses of the system with the mobile industry and that steps have
been taken to limit the liability of users, and young people in
particular.
"[Mobile networks and banks] have committed to ensuring
consumers are not put at an increased risk due to the development
of this technology, especially young people who are often the
earliest adopters of technology and suffer from disproportionate
risk.
On 1 November the law will change in the UK when the European
Union's Payment Services Directive comes into force. This will
allow non-banks to offer payments services as long as they are
regulated by the Financial Services Authority (FSA).
This could lead to an increase in the range of payment services
being offered using technologies such as mobile phone-based
contactless payment systems.
"These guidelines are an important step forward in protecting
the public from criminals," said Home Office Minister Alan
Campbell. "I am pleased that the mobile and banking industries have
worked with us to ensure that the public are protected at the
earliest opportunity."
"This technology is an exciting new development but we must
continue to work together to reduce any new opportunities for
criminals to profit from mobile theft. As new technologies like
this develop we aim to consider where safeguards can be
incorporated at the drawing board stage," said Campbell.
The guidelines stipulate that transactions over £10 will need a
personal identification number (PIN) to be validated, and that the
same rule will apply when a number of transactions under that
threshold are carried out in quick succession.
The guidelines also instruct providers to make sure that it is
possible to disable contactless payment phones "as soon as
possible" when their theft is reported. Providers will also
encourage customers to register their phone with theft database the
National Mobile Phone Register.
The Government recently launched a consultation on the use of
contactless payments in the UK's travel infrastructure, which was
seen as a move to put some structure on that part of the payments
sector ahead of November's law change.
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