The introduction of mobile payments (m-payments) into the Canadian marketplace has brought both convenience and potential risks for Canadian consumers, according to a research report published by Financial Consumer Agency of Canada (FCAC).

According to the study report, users of m-payments in Canada are not all protected equally, as consumer protection obligations vary by service provider.
The report says that mobile devices represent an opportunity to improve disclosure by informing consumers and seeking consent in real time.
Also, the authors of the report cautioned that m-payment service providers may sell user data to third-party marketers, who then target consumers with advertising based on demographic, behavioral and geographic information.

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"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," according to the report.

The study also found that tThe 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, the report added.

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.

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Lucie Tedesco, commissioner of FCAC, said: "While m-payments are still evolving and are not yet mainstream, their emergence in the marketplace has triggered important questions related to consumer protection.

"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."