In their study entitled Mobile Payments and Consumer Protection in Canada, the authors examined the extent to which financial consumers in Canada are protected when making m-payments and found that consumer protections vary across the Canadian marketplace.

An m-payment is a payment made with a smartphone or other mobile device instead of a more traditional payment method, such as cash or credit or debit card. M-payments are expected to be widely adopted in Canada over the near term. "While m-payments are still evolving and are not yet mainstream, their emergence in the marketplace has triggered important questions related to consumer protection," said Lucie Tedesco, Commissioner of FCAC. "We need to be in front of these issues today so that we understand what is at stake and bring to light the implications for Canadians."

A few highlights from this study:

Users of m-payments in Canada are not all protected equally, as consumer protection obligations vary by service provider.

Mobile devices represent an opportunity to improve disclosure by informing consumers and seeking consent in real time.

M-payment service providers may sell user data to third-party marketers, who then target consumers with advertising based on demographic, behavioural and geographic information. This practice, known as profiling, may provide benefits to consumers, but it may also pose new risks, particularly when products are marketed to vulnerable consumers.

The number of stakeholders involved in an m-payment transaction may increase the level of complexity related to dispute resolution and redress. In the event of an error or unfair treatment, a consumer may be unsure as to how or where to file a complaint or obtain redress.

FCAC will leverage the study's findings as they apply to consumer education. It is currently developing information to help consumers understand how m-payments work and what their implications are and it is working to make Canadians more aware e awe aware of profiling and malware threats and the ways they can best protect themselves.