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April 27, 2012, 2:32 p.m.

On April 26 the National Retail Federation told the Federal Trade Commission to stay out of mobile payments http://bit.ly/JxG0uv . They gave several lucid reasons for doing so:

Any regulations adopted “should parallel those for the underlying form of payment and not be specific to the technology”

Mobile technology and practices are just emerging and “the government should not impose regulations that would forestall yet-to-be-imagined advances and innovation in order to avoid potential harm based largely on speculation”

Mobile phones are “just a device, not a payment” and that “actual payment could take place via a credit or debit card, directly from a bank account, be processed through the user’s phone bill”

The National Retail Federation is the largest retail trade association in the world, and here they are telling the U.S. government and the rest of us to let mobile payments emerge and happen the way the market will have it. To me, that is an encouraging message to any would be player in the mobile payments ecosystem both NFC-based or cloud-based. Retailers want the market to slug it out.

Regulation is the enemy of innovation. For mobile payments to have any chance, they must evolve as dictated by the marketplace. The NRF is right – there are plenty of regulations in place for the payment industry as it stands and no need at this point to make any distinction about what device is used to make payments. We stand a chance of mobile payments succeeding in the U.S. if the FTC stays on the sideline.

So does that mean the European Commission isn’t interested in letting the free market create innovation in the mobile payments space with their probe of Project Oscar? Will consumers be harmed in these early days? It will be interesting to see if the FTC stays out of it. I hope they do, or we can kiss mobile payments goodbye.

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