House Financial Services Committee

Ubiquity Thematic in House Hearing on Mobile Payments

House Financial Services Committee - Mobile PaymentsMobile payments are “ubiquitous,” according to one Massachusetts congressman, and they are on the rise around the world.

Stephen Lynch is a Democratic Congressman from the State of Massachusetts, and he is on the House Financial Services Committee.


During a recent hearing entitled in that committee entitled, “Is Cash Still King? Reviewing the Rise of Mobile Payments” Lynch noted, “The ubiquity of mobile payments is on the rise in Europe, Asia, and our competitors there will also continue to develop their own technology. We must learn from their experience and focus on meeting the needs of all our consumers here at home.”

Congressman Tom Emmer is a Republican from the State of Minnesota, who is also on the committee.

During his remarks, he spoke about the ubiquity of mobile payments.

“The term mobile payment is so broad that it even fails to capture all the improvements in ease and convenience of payment, as well as the growing methods of payment.” He continued later, “Apple Pay, Venmo, Zelle, Square Cash, and even Bitcoin are now household names. Some of the most successful mobile payment application include Uber and Lyft. Or I can open my favorite merchant mobile app, select items to purchase, see what coupons and rewards are available, and in one click, purchase my item.”

Both Lynch and Emmer are members of the Task Forces on Financial Technology and Artificial Intelligence, a new creation of the House Financial Services Committee Chair Maxine Waters, a Democrat from the State of California.

Lynch Chairs while Emmers is the Ranking Member, or head of the minority.

Usman Ahmed is the Head of Public Policy at PayPal Inc. and he was one of the witnesses at the hearing.

He also had something to say about ubiquity.

“Cash is a ubiquitous form of payment, but while it may appear costless to transfer there are costs associated with cash. Cash is deeply implicated in tax evasion which costs the US federal government some $500 billion a year in revenue.”  Ahmed said, “When Mexican drug lord El Chapo was arrested, there was more than $200 million in cash found on the premises and the global drug trade is estimated at $600 billion. And finally, twenty percent of US consumers report having cash lost or stolen.”

Ubiquity may have been on the mind of another witness, Deyanira Del Rio, the Co-Executive Director at the New Economy Project, an economic justice center based in New York City.

During her opening remarks, she noted, “the term fintech obviously is very broad and is used in many ways, it can refer to a range of companies and technologies.”

In her opening remarks, Del Rio argued that far too often the poor, minorities, and underbanked, are exploited by a lack of oversight governing these technologies.

Referring to an analysis her organization did of New York City, she noted, “There’s fewer than one bank branch per ten thousand residents in communities that are predominantly black or Latino and that compares to three and a half branches in predominantly white neighborhoods.”

“Too often discussions about financial access disparities, including the use of cash versus credit or debit, focus on choices or behaviors of individuals, or on the need to design so-called alternative products, rather than on addressing the continued structural barriers that block millions of people,” Del Rio continued in her opening remarks, “including poor people, immigrants, low wage workers, and many others from accessing mainstream and strongly regulated institutions products and systems.

“As this committee knows, there are multiple impediments and some of them include the high costs of maintaining bank accounts, persistent redlining as I mentioned, and prohibitive identification requirements, which all create real barriers to entry to millions of people.”

This is not the first time that House Financial Services Committee hearing has suggested that financial technology has contributed to the disenfranchisement of poor and minorities.

In a hearing in July 2019 entitled, “Perspectives on Artificial Intelligence: Where We Are and the Next Frontier in Financial Services” it was suggested AI was leading to more racial discrimination.

Dr. Nicol Turner, a fellow of Governance Studies at the Center for Technology Innovation at the Brookings Institution, a think tank, and she testified at the hearing.

“Latanya Sweeney, Harvard researcher and former chief technology officer at the Federal Trade Commission (FTC), found the micro-targeting of higher-interest credit cards and other financial products when the computer inferred that the subjects were African-Americans, despite having similar backgrounds to whites,” Dr. Turner stated during the hearing. “During a public presentation at an FTC hearing on big data, Sweeney demonstrated how a web site, which marketed the centennial celebration of an all-black fraternity, received continuous ad suggestions for purchasing ‘arrest records’ or accepting high-interest credit card offerings.”