In part 2 of our 4 part series on mobile payments we discussed the various stakeholders participating in a mobile payments solution and the complex and interdependent relationship among them.
The following are key areas to focus on in the initial planning phase prior to entering into any contractual arrangements:
- Carefully scope out and define the role(s) to be played by each stakeholder in the mobile payments solution.
- Define and compare the different goals and risk tolerances of each of the stakeholders.
- Identify any “weak links” in the overall solution, whether as a result of the risk tolerance of a particular stakeholder, a likely technical challenge or a “gap” in the chain of responsibilities among the stakeholders.
- Clearly define milestones and dependencies in the overall project plan for developing and testing the solution.
- Research each stakeholder’s obligations with respect to compliance with industry standards, laws and regulations which may apply to each stakeholder.
- Establish a governance framework that enables all stakeholders to share information, progress reports and objectives as openly as possible. This will likely require one or more carefully crafted confidentiality agreements among the stakeholders balancing, as much as possible, the need for transparency, as much as possible, the need for transparency while protecting each stakeholder’s sensitive information.
For lawyers and other advisors, navigating this new world will require us to think outside the box to formulate service arrangements, models and strategies to address these new solutions and associated risks. In part 4, we will discuss the contractual framework and legal risks associated with mobile payment solutions.