The white paper calls for new regulation, including legislation, requiring enhanced security measures in alternative payments apps. The Federal Trade Commission should enforce safeguards for these new payments companies and even the playing field for banks.
According to the white paper, point-of-sale platforms like Square, peer-to-peer money transfer services like Venmo, digital wallets like Apple Pay and application programming interfaces such as those developed by Stripe are all part of a young industry where many have failed to implement layered security measures.
These services routinely require their users to submit sensitive data and bank account information, the white paper notes. Although they handle much of the same data and process similar types of consumer payments as banks, financial regulations have not been modified to cover their activity, The Clearing House contends, and the burden falls still on the banks to endure financial losses in case of a security lapse.
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