Myths About Mobile Wallets

Enron Scandal

An example of how accounts do not always represent a true and fair view, is that of the Enron Scandal. The Enron Scandal was when fraudulent accounting techniques such as "mark to market" accounting were used to make Enron's accounts look "healthier" by falsely representing the company.

For instance they grossly overvalued assets, and committed many other false representations. This scandal actually highlighted failings on the auditor's part as well. The auditing company was Arthur Andersen and it was found to not have been forceful enough in its investigations, whilst at the same time ignoring the fact that the company had a conflict of interest in their affairs with Enron. The conflict of interest was that whilst being the auditors (and effectively working for the shareholders), they were also providing business services to Enron. In the aftermath, new legislation attempted to correct these shortcomings. An example of such legislation is the Sarbanes-Oxley Act of 2002.

What are Internal Auditors?

Internal auditors differ from external auditors in that they are hired by the company's directors and not the shareholders. They therefore report to the directors and not the shareholders. The job of the internal auditors is to ensure that the company's accounts represent a true and fair view. This is important for various reasons.

First, it ensures that the accounts are accurate, reduces the work of the external auditors (and therefore their interference), and it protects the company from unknowingly committing fraud (and therefore being subject to preventable litigation). Unlike the external auditors, the internal auditors have a direct duty to look for fraud, whilst the external auditors only have to keep an eye out for it. The internal auditors carry out their duties by ensuring that the company's controls are operating effectively and by doing testing similar to that of external auditors.

Myths About Mobile Wallets

· Jun 22, 2012

· Daniel Workman

The biggest stumbling blocks preventing consumers from adopting virtual payments may well be the misconceptions about what a mobile wallet is and can do.

Canada’s first mobile wallet is expected to be available later in 2012.

As recently announced by CIBC and Rogers Communications, the new joint payment solution will let CIBC credit cardholders pay by tapping their smartphones on MasterCard PayPass or Visa payWave terminals at checkout. For some Canadians, the new technology will immediately change how they conduct every day purchases.

“Canada already has the largest distribution of mobile-ready, contactless readers in the world,” says David Robinson, Vice-President of Emerging Business at Rogers. Robinson has been a key player working on the mobile payments project since 2005, an initiative supported by guidelinesfrom the Canadian Bankers Association and eight of Canada’s largest financial institutions.

In a recent interview with Suite101, Robinson exploded some of the myths surrounding virtual wallets.

Myth No. 1: An overly complex tool

Not knowing exactly what the term ‘mobile wallet’ means, many people assume that the new technology is difficult to master.

In reality, the smartphone screen becomes your wallet. “It can be nothing more than a folder into which you put whatever it is you want to store on your mobile phone,” says Robinson.

Myth No. 2: Long user learning curve

If you know how to use a tap-and-go credit card, paying with your smartphone is almost the same. CIBC-Rogers development teams were sensitive about demanding too many changes in consumer behaviour to accommodate the new technology.

“What the mobile phone payment application does is emulate a MasterCard PayPass or Visa payWave credit card,” explains Robinson. “The beauty of that is the existing PayPass or payWave readers are reusable for mobile wallets.”

Myth No. 3: Limitations on number of cards

People also tend to associate mobile wallets with limitations from their previous experiences, like the number of plastic cards they can cram into a leather wallet. While the scope of the initial mobile wallet focuses on CIBC credit cards, users can add memory to smartphones to accommodate a vast number of other card applications.

“The new joint payment solution isn’t restricted to MasterCard and Visa credit cards,” says Robinson. “In future, all types of plastic cards including store cards, gift cards, loyalty cards, driver’s licences, health cards, building access cards and transit passes will be stored on a mobile wallet.”

Myth No. 4: Riskier and less secure

Another reality is that mobile wallets are less vulnerable to identity fraud than plastic chip cards. That’s because the radios embedded in credit card contactless chips are always on. In contrast, the radio in a mobile wallet is only active when consumers turn on their smartphones. “Personally, my phone defaults to locked every five minutes,” explains Robinson. “If I let my phone idle for more than a few minutes, then it locks.”

Provided that you report your loss promptly, banks and credit card companies in Canada assume most of the liability when your mobile wallet is lost or stolen. After you verify your identity with the financial institution, you can then repopulate mobile payment apps over to the replacement smartphone in real time. In some ways, mobile wallets alleviate a lot of the stress that would otherwise result from losing your traditional wallet.

Myth No. 5: Roaming charges

We’ve all heard the horror stories about astronomical cell phone charges unknowingly incurred by travelers. Yet Canadians will be able to use the new mobile wallets on MasterCard PayPass or Visa payWave terminals around the world free from any roaming charges.

“You have to remember that the wireless network is not used when you’re using the mobile wallet or plastic card with the payment terminal in the store,” explains Robinson. “The distance between the phone and the payment terminal is about two centimeters. So, mobile payment tap-and-go payments don’t use the cellular networks.”

This project isn’t a made-in-Canada, made-for-CIBC project. “It’s the beginnings of a global trend towards commercialization of virtual cards you know and love on your mobile phones,” concludes Robinson.

“It’ll work everywhere in the world, exactly the same.”

Date: 2015-12-11; view: 1034