While no one mobile payment system has gained serious traction with consumer, there's little doubt that companies like Google, Square, ISIS, and others will be competing for consumers' virtual wallets over the next few years. As such, the FTC has just issued a report on the mobile payment space, with recommendations for consumers and companies hoping to make paying with your cell phone a mainstream practice. The report, which is based on findings from a workshop the FTC held last April, focuses on three main areas where concerns are likely to arise with consumers: dispute resolution, data security, and privacy.

The FTC recommends that all companies in the mobile payments chain develop clear policies on reporting and resolving fradulent payments or unauthorized charges. The report notes that since mobile wallets often allow users to link to multiple payment sources, "mobile payment users may not recognize that their protections against fraudulent or unauthorized transactions can vary greatly depending on the underlying funding source." Of course, the responsibility for understanding the protections offered by different payment methods is really the responsibility of the end user, but any steps that can be taken to make users more aware of exactly how protected their payment methods are when linking them to mobile payments could help.

The FTC's recommendations hinge mostly on common sense, for both businesses and consumers

The FTC also acknowledged the need for best practices when dealing with data security up and down the mobile payment chain — a federal study showed that 42 percent of survey respondents were concerned with security surrounding mobile payments and cited it as the number one reason they hadn't tried using a mobile wallet. The study recommends that "mobile payment providers should increase data security as sensitive financial information moves through the payment channel, and encourage adoption of strong security measures by all companies in the mobile payments chain." However, the FTC also noted that consumers should take "practical steps" to securing their data, like putting passwords on their phones and implementing secondary passwords for mobile payment apps.

Transparency, security, and privacy

Another issue discovered by the FTC surrounded the privacy of personal data associated with mobile payments — both the number of companies in the mobile payment chain as well as the amount of data being collected were topics of concern. The FTC's recommendations weren't exactly ground-breaking: it encourages "privacy by design" when building all aspects of a mobile payment system, consumers should have the option to easily opt out of sharing data not relevant to the transaction at hand, and companies need to provide transparency around their data practices.

Overall, most of the recommendations the FTC made were mostly common-sense logic, but it's still important for the FTC to get involved as this particular bit of technology grows. If, as the FTC predicts, mobile payments will achieve "widespread consumer adoption" by 2015, consumers will want to know exactly what they're getting into — and the company that is most transparent and open about how their mobile wallet works might be the one to finally break into the mainstream.