Hearing of the Financial Institutions and Consumer Credit Subcommittee of the House Financial Services Committee - The Future of Money: How Mobile Payments Could Change Financial Services

Statement

Congresswoman Shelley Moore Capito, R-W.Va., Chairman of the Subcommittee on Financial Institutions and Consumer Credit, delivered the following opening remarks at today's Financial Institutions and Consumer Credithearing entitles"The Future of Money: How Mobile Payments Could Change Financial Services."

Remarks as prepared for delivery:

This hearing will come to order. We are expecting votes as early as 11:30am and if we are unable to complete the hearing before votes end we will have to return after they are completed.

We meet today to begin what I think is an exciting and important task: making sure our financial system and its regulatory structure are prepared to enter the new world of mobile payments.

While most people believe that making a mobile payment involves waving a smart phone at a cash register -- and it may -- there are a lot more ways to exchange value. Contactless cards and short e-mail-like messages giving instructions to transfer value represent other forms of mobile payments. The whole field offers the possibility of faster and cheaper transfers of value, oftentimes with the promise of enhanced security that surpasses what is possible today. We are on the precipice of fundamental change in the way money is exchanged between consumers and businesses, which is my today's hearing is entitled "The Future of Money."

While some aspects of mobile payments have been with us for a while and some business models are already developed, other aspects of mobile payments are in the beginning stages of pilot programs. Either way there's a lot for Congress, banks, regulators, retailers and customers to learn.

Most importantly we must make sure that these payments are safe and secure--at least as safe as using cash, checks or credit cards, and hopefully even more so. Bringing the strength of high-powered computers to bear on account safety should allow us to erect layers of security that help foil the hackers who lie in wait on the Internet today, stealing millions of identities and billions of dollars annually. After all, the smart phone that was essentially non-existent less than six years ago is said to be far more powerful than the large super-computers of the 1980s.

Today's hearing is an introduction to mobile payments, the first I am aware of to be held by Congress. We have five expert witnesses who can discuss broadly the state of the mobile payment industry, and where and how fast they see it developing. Among them is Richard Oliver, until he retired last fall the Federal Reserve's top mobile payments expert and the principle author of the Fed's widely praised white paper on the subject. We also have experts from the issuer side, and from the standards side of mobile payments, and a consumer specialist. I look forward to hearing their testimony.

I now would like to recognize the Ranking Minority Member, the Gentlelady from New York, Mrs. Maloney for the purpose of making an opening statement.

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