effect. in fact, it takes isis about two weeks to once again start pumping many of the targets that we attack and at a cost of only $200,000 to be able to once again draw oil out of the ground and transport it. we have to enjoin our regional partners, and especially our nato allies to view the threat as seriously as it must be viewed. in this respect, u.s. leadership is absolutely critical and i would argue turkey is going to be an enormously important test case. in many respects, the problems and the travails we experienced in pakistan and south asia over the past decade and a half are being replicated with turkey. turkey, of course, is a nato ally. finally, i think we need to develop an effective strategy to measure effectiveness against the one i think most important dimension of the terrorist threat. and that's their ability to spawn franchises or affiliates and associates or vil yets

provinces. we'll know we're winning when the number of affiliates associates, franchises, provinces is diminishing rather than growing. and finally, we need to recognize and behave as if we are indeed in a long war. a long war that requires unceasi unceasing vigilance overseas. thank you. i don't know if we have the video that we were going to run. i would like to start with that. thank you so much for being here. i'll just stay right here. but the video that i'm going to play is from my trip. it's just a small piece of a number of videos that i have taken when i was in iraq this past year. i spent some time -- it's coming out.

>> i can't even imagine the horror for mothers to watch their own little children being executed. there was no place to turn. and to even look at their own grave before they died. i just -- i can't even imagine. >> you know, i only wish i could take every one of you to sinjar, to see the atrocities for yourself. you know, so many times we spend watching television. we're very disconnected.

it seems like a movie. it doesn't seem real. we tell ourselves, oh, this will never happen in america. we'll never see anything like this in paris. but for the people of iraq and now we've seen what's evolved from this, from their capabilities by having a sanctuary that they have established, a territory in a terrain that has not been challenged to the extent it needs to be. they were allowed to metastas e metastasize. and that has become our most difficult objective. of when i was on the ground, the most important thing for me as a reporter is to tell you the truth. what i'm seeing. not to deliver a narrative, not to listen to what the white house is saying is happening or to the defense department. it's to tell you what i as a person on the ground am gathering as information to deliver to the american people or to lawmakers so that they can

best make their own decisions. and what was interesting was, as i spoke to the peshmerga fighters and spent time with them on the mountain right before sinjar village was taken and as i spoke with the azitis who escaped the atrocities and some who lost their family members, some who lost their daughters, their children to these people, and still don't even know where they're at. i began to put together a picture of how the narrative shifts. how it's so different. i remember last year when the president had sent the -- you know, the neos. they were going to send neos and rescue people off of mt. sinjar. islamic state had taken over the province, we were going to come in, we were going to make a difference. and then it was like, well, we didn't really need to rescue them. we just -- we dropped some aid, everybody is fine. most of the people made it off the mountain. and then i get there a year later, and they were like, no,

everybody was not fine. more than 3,000 to 5,000 people were executed in mass graves. these were not just men who were fighting them. these were small children and women and the elderly who couldn't get away from them fast enough. bodies were piled on top of each other. children were slaughtered. they were slaughtered. and the rest of them were left to die on the mountain. and then, you know, groups like the pkk or ypg, ypj, different militia groups were helping them through the mountain pass and into syria. let me -- as a reporter, bring you a message. from a young aziti girl i met on the road in sinjar, her car had broken down. it was a beat-up suv. her family was making their way back from turkey. they had escaped kojo and were heading to a u.n. camp just

outside of sinjar, hoping they would find some help or some food. she said, "we want the world to declare what happened to us a genocide. but where is the world? islamic state -- she called it, captured lots of people when they arrived. many diplomat escape. they killed lots of children. we asked, where is the world? where is the great u.s. of a? isn't dash a threat to your nation as well?" where were we? where was europe? we all turned a blind eye to what was happening on the ground. our air force, amazing air force pilots, trying to do their job, would literally fly over -- do flyovers, would get calls from peshmerga fighters on the ground, i interviewed them.

they said we would call for air strikes. we would know that our air force pilots were up in the air and then we would hear no authority to strike. what? there could be civilians. we don't have authority to strike. there's no civilians driving that humvee straight at us, loaded with ammo. you know, or a v-bid. we're sure there's no civilians, we're telling you there's none. one of the things that happened, i believe, over the last few years is a breakdown in trust. between our allies overseas and america. and now what we're left with is little pieces of information. so many people i've traveled to afghanistan many times as well. are afraid. they're afraid to share information with us. they're afraid that they're going to ask for help and no one will arrive. well, who can blame them? our military, you know, just being a reporter from the ground interviewing our men and women

in uniform, are frustrated. they want to do this job. they volunteered to fight for our country. they don't want -- this is what they tell me -- for these islamic state fighters, these radicals, to be able to radicalize more people or to be able to come into our country and conduct attacks as atrocious as we have seen. my hometown of san bernardino. my prayers and thoughts are with them. like we saw in san bernardino or in paris or charlie hebdo or in had your key or in lebanon. we could just keep adding, adding, adding. and is we're still going to be adding more attacks. you know, the first step -- when i came here, i thought, what is the first step? you know, the first step for anybody, whether you're sick or whether you're facing an enemy, is admitting what the problem is. even if it doesn't fit the narrative.

so even if i would have gone to sinjar province and i had heard little rumors here and there, and they would have told me, no, everybody is great. you know, u.s. came in, we were rescued, it was awesome. a lot of people's lives were saved. that's what i would have reported to you. because that's the truth from the ground. but the problem is now very few people are telling that truth. and a lot of times, the media -- it's our fault too, perpetuates a narrative, because it's easier to perpetuate that narrative than actually go there, see for yourself, try to find somebody who speaks the language well enough that can help you with the interviews, put your life on the line. and remember, the greatest -- the greatest information that we get from the ground are from the reporters that live there. but their lives are so threatened and so many have died. 181 reporters, bloggers,

writers, killed in syria. more than 29 still missing. because they're a highly valuable asset to islamic state, which has their own narrative to get across. a narrative that we haven't been able to combat. you know, the kurdish fighters were up against -- are up against 35,000-plus islamic state militants. you know, who have former iraqi military equipment, much of which we donated or gave or left behind to the iraqi army or sold to them. and what was interesting is that they -- they're willing to fight. they say we're willing to go out there, we're willing to take on islamic state, just like they did in sinjar. with air support. with strong air support. because it's very difficult for them, because they're up against what happens islamic state takes our humvees. they fill them up with explosive and just like they did in ramadi, they move straight through a battalion of humvees. a humvee is ready to just blow

themselves up and take out a whole slew of peshmerga fighters. we have troops on the ground. they may be peshmerga, they may be iraqi special forces. they may be free syrian army guys that for some reason or other still trust us. maybe. maybe they're there. i don't know. i haven't been to sear yeah. i haven't been able to interview them. so i really can't tell you that narrative. but the thing is, one thing we know for sure is that they have lost their trust in us. and they're trying to rebuild that trust. we know that islamic state has gained such a powerful force. it's met as sized itself across the globe and as you have seen from these amazing panelists with all of their information, it's quite true, even in south asia, afghanistan and pakistan, where i hope to visit soon. and we have seen this expand and there has been very little that

we have done to actually stop it. or to actually tell these stories. the reality of what's happening on the ground. you know, mosul -- and i think it was jim brought up a very good point here. you know, when we talk about mosul, the second-largest city in iraq and i saw the signs on the way to mosul as i drove around mosul, not through mosul to get to sinjar mountain, mosul is still getting money to pay for electricity, for their supplies, from the central baghdad government. who is collecting all of that money? islamic state. they're in control of mosul. you know? and it's true there are many civilians caught in the middle of this. there are many disenfranchised sunnis on the ground. and one of the things that potentially could be a major problem for us in this war against islamic state is the fact that sectarian divides have so increased over the past year,

and particularly with shia militias within the sunni communities that it's like a hot bed right now. so not only do we have islamic state, but we have a potential disaster on our hands inside iraq. and some people say it's already there. i say it hasn't gotten to the apex yet. and we'll know that when we start seeing it on the news. people slaughtering each other again. and you know, disenfranchised sunnis living in the badlands, not being able to return back to their villages. and i'm going to wrap it up because i know we have all talked for so long. if there is anything i can maybe deliver to you is that we really have to listen to the people who are living with this every day. and we have to listen to their stories. and we can't distance ourselves from them, from the people of iraq or from the people of afghanistan and pakistan. there are still people out there who are good, who want the truth to come out, who want us to be their ally again. and you know, there are experts

out here who can tell the united states how to accomplish these missions. but it's up to the administration and it's up to the lawmakers to say what that mission is. and what that strategy is. because right now nobody knows. >> thank you. >> so we have a bit of time to open up for questions. if you have a question, raise your hand and let me recognize you. while doing that, i have a couple of resources i want to mention that are available to you. one of them is shown on the side screens here, which is a very powerful analytical tool we've developed. it's an interactive time line. we have a database of slim islamist terror plots aimed at the united states since 9/11. this is author at a timive information. the things katie talked about, which are -- if you look at the nature of the terror threat against the united states, it's

all of the above. right? and so virtually every tactic technique that could potentially be available to a terrorist group has been aimed at the united states. which is important when you think about the countering that as when everybody has, you know, kind of an easy button answer or a bumper sticker that says seal the border or keep out the refugees or cut off the visas or visa waiver program -- the terrorists just move on to something else. so in your counterterrorism programs, you want to be if he can carbs and have due diligence. somehow if we just put a plug in this part of the dam and the flood is stopped is a really wrong way to do that. in many ways, you're going to do more damage to yourself in terms of your freedom and your prosperity and your own security by kind of fixating on something. if you just put my bumper sticker up there, this problem westbound solved. it's a powerful tool. it was mentioned today the report we did in 2011, the analysis of the administration,

counterterrorism strategy, counterterrorism for the next wave, i think that's a very important paper i would recommend to you. another one that lisa coauthored, a report that we did that looked at the ideological element and the political version, political islam. and how do you combat that, which has to be paired with your counterterrorism strategy. and that's also available online. and a third paper, which lisa has been laboring on, with a great team, looks at the foreign fighter threat, which is something that bruce and several others reports is important. and to me it's shocking we don't have an integrated foreign fighter pipeline strategy. after all these years and the many times we have seen it. that paper will be out in the relative near future. having said that, we're happy to take questions. and we'll start in the -- i think why don't we start easy, go down here because you're in the front and work our way back to the center and sides. we'll get as many questions as we can in the time we have available. >> hi. i'm penny star with cns news. i guess this may be for kathryn,

but anyone else on the san bernardino incident. and how the discussion has been mostly about gun control and workplace violence. if you -- in the media. i mean, they're saying that it could be terrorism. but it's interesting to me that that's not been at the forefront of the discussion. i wonder if you could comment on that. thank you. >> thank you. >> well, i would just say, first of all, i think law enforcement and fbi have been unfairly criticized for not coming out and saying it's terrorism. they need to know. right? and they didn't know. you know, maybe now today we do know. but i think they have done everything right. i think the media is another problem. i think the administration is another problem. i agree with you, absolutely. you know, to jump to guns, as well as to jump to causes. is really the wrong way to go about this. and i think, you know -- we have got a big problem on our hands. because of that. >> so let me ask bruce to come in. we were talking beforehand this is a plot that is kind of different from anything we have

seen before. do you have any observations on what we have seen in san bernardino? >> well, firstly, shooters like this are extremely rare. i think 5% of all the mass killings in the united states in recent years have involved more than one person. but secondly, to have a husband and wife team is not completely unprecedented, but somewhat unprecedented. the only other example i can think of was last year, the husband and wife shooting in las vegas, which was white supremacist related. here i think what has been reported, and which suggests that this is a lot more than about gun control, is just firstly the vast amounts of ammunition they stockpile, but then also this cache of explosives. so clearly, they were intent on a more sustained campaign of something. which leads one to think perhaps that it's -- that it's -- that is involves terrorism. much more. but also, what struck me, why does it have to be owe

either/or. it could be both workplace violence and on top of a ideological. it doesn't have to be exclusive. people become terrorists for all sorts of reasons. generally, at least, the most common conventional wisdom, it's some sense of injustice. this is what motivates people to engage in workplace violence, too. so it could be personal and a ideological motivation, as well. i'm not necessarily sure we have to exclude either. and one cancels out the other. >> the other thing, we have had an increasing number of plots in the last two years. to my mind, this is the first plot that we have seen that wasn't almost exclusively homegro homegrown, where there's been reporting, at least, of some transnational connections and affiliations. >> maybe. you know, the trouble is, we often only pay attention to terrorism when tragically the blood is already spilt. so when there is bloodshed, we

pay attention to any incident. in my view, the plot that fbi director james comey talked about this year, that clearly had an isis involvement, that resulted in the arrests of upwards of ten individuals, and at least publicly i assume because the case is still under investigation, hasn't come to trial. a lot of the details have not been released. but we don't know exactly what the isis part -- he clearly said there was an isis dimension of it. that failed. it was disruptured i think because of the sophisticated abilities of the fbi in recent years. but the point is, we have forgotten about it. that should have been a very important harbinger or warning. >> lisa? >> yeah, i was going to say, there have been several attempted plots in the u.s. that have had international connections. of course, the may 2010 attempted car bombing of times square by sa liam shahzad who was from pakistan, traveled from pakistan. there were connections to the ttp. and then as well the najibullah

zazi y plot, the new york subway plot, also connections internationally to that attempt, as well. >> katie? -- we have another question down here in the center then. we'll go here and then the gentleman behind you. we've got three. so we'll just go one, two, three and see how we do here. >> yeah. thanks very much for the wide-ranging presentation. especially sara's and the former journalist and correspondent. really appreciate your comments. i spent many years in the state department counterterrorism office. so i'm approaching this as a practitioner. and i think one thing that may be overlooked is both the offensive and defensive. and in terms of the defensive, the training, for example, it doesn't really depend on the nomenclature of the slides of what you call up the s.w.a.t. teams we saw visibly yesterday. and other types of training, including that that we provide to countries overseas.

the motive doesn't matter so much as the techniques, et cetera. so i think there's a little bit too much overemphasis in some sem unanimous particulars on what the administration calls or doesn't call fundamentalism. and the other thing that's overlooked, president reagan following the beirut bombings and other incidents, said terrorism is a crime, terrorists are criminals. no matter what their motivation. that's kind of overlooked. and i think, for example, the justice department and fbi have conducted something like 270 prosecutions under the material support provision, which i helped draft with justice department. so i think it's a mistake to look at this purely as a war, because we have to think and use all the tools available. and the other aspect i would like to pick up, where you downgraded the psychology

aspect. but this is also important tool to try to understand the terrorists, partly to try to detect them, whether border security or possible suspects. and there's all sorts of motivations. but i don't think we can, you know, overlook this completely. it's a very useful tool. it's fashionable to say that one way to get rid of gun violence is improve mental health. but here we have a situation in san bernardino, where it looks like they would never have been picked up on the screen -- mental health professionals. and so there's -- the other aspect of defensive of how do you make it more difficult for them to get -- >> so maybe we can get katie to do a quick response and then go to the next question. >> i'm going to respond to the last point, because this is one i feel very strongly about. the problem is, the psychology angle has not yielded anything useful so far. and we're putting too much effort into that. and we're completely ignoring

the aspects that are valuable. so, for example, if you look at the cases of the -- just the isis supporters in the last 14 months, they're repeatedly, you see -- sort of appearance or behavioral indicators of radicalization, right? and we saw it in this case with san bernardino, as well. we are ignoring that. the suspicious activities report list that law enforcement uses, they're not allowed to even talk about those aspects. so i would push back. i would say -- i mean, you know, god bless the psychologists who want to keep pursuing it. maybe they will unlock something useful at some point. they haven't yet. and let's pay more attention to the other things that are of value and of use to law enforcement. >> okay. sir? >> thank you. petry buckhom here in washington. and i've got a question regarding syria. are there any views of the panel on political and diplomatic

options that haven't been yet leveraged to perhaps encourage president assad to step aside? let me ask jim to address that and then we'll go to the gentleman behind you. >> yeah, i think ultimately, islamist assad in power, that will come to the nusra the al-qaeda affiliates benefit. any long-term strategy for defeating isis there has to include removing assad from power. but i'm not as optimistic as some in the administration appear to be about the prospects of having russia/greece the skids under assad. they have been continually dropping hints apparently out of the u.n. ambassador up in new york is continually saying, you know, we're not wedded to assad. we need some kind of structure behind him, where the iranians are much more clearly supportive

of assad. but i think these tend to be diplomatic winks of the eye kind of flirting to get u.s. buy-in for u.s.-russian brokered process that -- you know, in the long run is needed but i don't think it's going to come about in the short run. >> sir? >> eli lake, columnist with bloomberg. was the moose mass shooting in san bernardino an act of war, and what are the conditions of victory if, indeed, it was an act of war? >> chris, do you want to start? >> it's nice to see eli actually in person and not sitting at home. on his game boy. >> well, i mean, i would -- i would bristle against -- i would bristle against calling it or describing it as an act of war,

because that implies then our enemy is a state. it may mean that our response has to be war-like, we're certainly involving military or kinetic force, depending on if it turns out to be terrorism in general. we have swung in opposite directions. in 2001 we treated this as entirely a criminal phenomenon. we know it's more than that. there is no police force in the world that can take on isis. there was no police force in the world that could have taken on the taliban or al qaeda in afghanistan. but at the same time, i think we have to use the tools to counterterrorism when they make the most sense, and what circumstances. i would say that san bernardino, whether it's terrorism or whether it's workplace violence or some other idiosyncratic justification is handled best and treated best as a law enforcement problem. but our criminal problem. the difference is, we still have to unravel what the pedigree or

what the background is, which raises lots of different implications that go beyond criminality and beyond law enforcement that involves intelligence, international intelligence, if there was a process of radicalization, if it is being reported this morning, there was some contact with individuals overseas that may account for the syed farook smashing of cell phones and deleting of files. then it goes beyond law enforcement. to my earlier point, i don't think it's mutually exclusive. we have to approach it from both dimensions, depending on the circumstances, the situation and the perpetrators. and actually, this is, i think, in recent weeks been france's approach with paris. it's been treated as both a law enforcement and a criminal issue. but also is a military one and intelligence one, as well. >> well, unfortunately, i think we have run out of time. we start late sometimes, but always end on time. so we only have two things to do. one is, our -- i've asked our panelists and some other folks to join together in a private

lunch and that's in the davis room. so if you exit and go down the hall and make another left, we'll be meeting down there. for everyone else, we've got some sandwiches and stuff outside. please encourage you to stick around and enjoy the sandwiches and discuss the issues that we talked about today. and the only other thing we have to do before this, please join me for thanking our panel for this presentation.

about an hour, canada's governor general opens the first session of the 42nd parliament of that country with a speech from ottawa. we'll bring it live starting at 2:30 eastern on c-span, courtesy of cpac. book tv has 48 hours of nonfiction books and authors every weekend on c-span 2. saturday afternoon at 2:00, it's the 15th annual vegas valley book festival in las vegas, featuring author talks on race, free speech and the american west. >> there's a fantastic word, and as tragic it had to bein

eventualitied, sole stall gentleman, the unconsolable loss of a place that you know, that has been pulled out from underneath your feet. so you feel nostalgia for a place you have been and want to go back to or where you grew up. this is where you're standing still and watching the landscape out of the front of your windshield or the front of your living room window go away. >> and at 10:00 p.m. eastern on "afterwards," pulitzer prize winning journalist gilbert gaul analyzes football. >> i don't think the players in a few years are going to be satisfied just with a couple thousand dollars. i think they're going to look around, some of them are quite smart. and they're at least smart enough to see where the money is, and how much is there, and what the coaches are being paid and ask why shouldn't they be getting more. >> and joining the conversation is tom mcmillan, former u.s. representative from maryland and president and ceo of the division 1a athletic directors' association. and sunday at noon on "in

depth," a live three-hour discussion with cokie roberts. she has authored several books, including "ladies of liberty", "founding mother". join us as we take your phone calls, e-mails, facebook comments and tweets. watch book tv all weekend, every weekend on c-span 2. every weekend on "american history tv" on c-span3, 48 hours of programs and events that tell our nation's story. saturday morning, beginning at 11:00 eastern, we're live from historic colonial williamsburg, the eve of the american revolution with reenactments of revolutionaries and british loyalists mingling on the streets. we'll tour the governor's palace and capitol building. and throughout the day, we'll take your calls and tweets about the colonial era with historians and experts. sunday morning at 10:00 on "road

to the white house rewind" we'll hear the aspirations of presidential hopefuls from 1987, former defense secretary donald rums felt shares his thoughts about running from manchester, new hampshire. and from 1994, dick cheney explores his possible run in the 1996 presidential race. >> i used to think of it as a political calculation. sit down and look at the landscape, try to figure out who else was going to run and what your prospects were. the more i think about it, the more it becomes a personal decision rather than a political decision. >> and later at 11:30 in lectures and history, southern illinois university edwardsville history professor, robert paulette on the caribbean sugar trade, its role in the development of britain's atlantic colonies and its impact on race and slavery in the 1600s. >> sugar was one of the main motors of the slave trade in america. 75% of all africans brought to the americas in the 1600s were brought to areas where they were

growing and making sugar. it was a huge business. it was -- some scholars argue, the first industrial enterprise in the western world. >> american history tv, all weekend, every weekend, only on c-span3. up next, a house subcommittee holds a hearing on the growing use of mobile payment technology and its security challenges. witnesses include representatives from samsung and paypal. this is about two hours. >> subcommittee on commerce manufacturing and trade will now come to order. the chair recognizes myself for five minutes for an opening statement. i want to welcome everyone to her hearing this morning examining mobile payments, which are to upend how customers pay for goods and services in stores, online, in apps, and at the parking meter. this hearing is the latest in our disruptive series.

covering a variety of technologies that are redefining our lives and improving our economic condition. this past week black friday, small business saturday, cyber monday, flooded all of our inboxes and took over the commercial breaks on television. as the holiday shopping season is in full swing, this is a good time to take a look at the consumer experience with mobile payments. this morning we will hear from our witnesses representing a variety of innovative products and services in the mobile payments arena. this hearing is an opportunity to learn about the innovations that are available to consumers today and those that will be available in the near future, but we recognize that there are exciting innovations on the horizon for payments, including mobile currencies, which will be a topic for another day. smartphones are increasingly an ever present part of our lives. it's no surprise that they are also changing the way we shop for goods and services. you can shop for your tablet in

front of the television, on your phone while you browse in the store, and pay without ever opening your wallet. consumers have access to more information and more competitive options are at the tip of their fingers during the busiest shopping season of the year. there has not been this big an upheaval in somehow consumers pay for goods and services from groceries to haircuts since computers replaced the old knuckle-buster manual ink printers in the 1980s. in 2014, 22% of mobile phone owners reported making a purchase with their phone. 39% used their phones to make a purchase in the store. when you find that perfect christmas gift, you may be able to pay by tapping your phone at check out or clicking the paypal check out button on a mobile website. when you want to send your friend money for the concert ticket they bought for you, all you need is their e-mail address or mobile phone number. these mobile payment options

include protections not available with cash, and are easy to use for consumers who may be more likely to have their phone in their pocket than carry the exact change with them. some basic questions remained top of mind for consumers when they think about mobile payments. are they safe? can i use my phone? this hearing is an opportunity to hear from companies implementing the cutting-edge technologies in mobile payments and how they are addressing these and other concerns raised by consumers. two of the top security topics that are raised by mobile payments are authentication, how the device knows you have permission to make the payment with the device, and tokenization. protecting your data through the payment process. we all know passwords are difficult. they are difficult to remember. they're difficult to keep straight, which is why many people, myself not included, but many people simply use their name for their user name and 1234 as their password. mobile devices offer some

alternatives to the traditional password that add an additional layer of protection for consumers. authentication is the process that a system uses to verify the identity of a person that wants access to the system. the user name and password is the most typical authentication process used to log into a variety of websites. mobile devices have changed. they've changed how people think about authentication. fingerprint sensors, cameras, are found in an increasing number of mobile devices. and instead of having to remember a separate password to unlock your phone or tablet, you may be able to use the fingerprint scanner to unlock the device with just a touch. this protects the information on the phone, including access to payment options. another security feature that is regularly brought up in discussions about mobile payments is tokenization. we're all familiar with the tokens you get at the fair or the arcade. tokens in a mobile payment system are similar in concept

replacing the value currency or payment information with a code that then becomes useless for another transaction if someone were to steal it. as has been the case throughout history, technology has the potential to solve problems and improve our lives. mobile payments are no exception to that trend. so i look forward this morning to hearing from our witnesses and how they're leveraging technologies to provide and easy experience for united states consumers as we make our way through this shopping season. i will yield back the balance of my time and recognize the subcommittee ranking member, ms. schakowsky. >> thank you, mr. chairman, for holding this hearing and this series of hearings on disrupters. i just learned that my bank -- i can now make a deposit by taking a picture of the front and back of my check and my bank will take it -- although it doesn't account for my husband's really

bad handwriting and says i can't verify the number i put in is the number he wrote on the check. that's a problem. but i think this holiday shopping season it is very important to hear from our witnesses about this important new technology. we do expect mobile payments to double from today to 2020. one of the fastest growing sectors of the u.s. economy. mobile payments do facilitate transactions from anyone to a food truck to farmers market, taxi driver, parking meter. they have made buying and selling goods and services easier in many ways. but as this technology continues to expand, we definitely need to understand how the payment structure works, security, consumer protection vulnerabilities, how to address those issues is the responsibility of our subcommittee. we want to maximize benefits and

minimize risks, obviously. mobile payment technologies rely on a number of nontraditional identifiers such as geolocation, purchase preference, phone numbers, e-mail addresses. those features can enhance protections against payment fraud. however they can also put consumer at greater risk if they are unprotected or if their use extends beyond managing payments. with regard to electronic communications generally, we need to ensure that all of the players engaged in mobile payments, hardware and software developers, businesses, banks, credit unions, and credit card companies are taking reasonable security measures to protect the information that they're handling. we also need to make sure that consumers know how these payment structures differ from more traditional transactions. consumers need to know how consumer financial liability for these type of payments differs from those made using credit or debit cards.

they should also know how mobile payments can be used to cram consumers. running up bills that they never explicitly approved. as the subcommittee responsible for consumer protection, we have an obligation to close those and other existing loopholes that leave consumers more vulnerable. so i look forward to hearing from our witnesses, getting their perspectives on opportunities, challenges, and the way forward with regard to mobile payments. and i yield back my time. >> the chair recognizes the chairman of the committee. mr. upton. five minutes for an opening statement, please. >> well, good morning. today we continue our disrupter series. we've previously examined the internet of things, the sharing economy, and most recently drones. today we discuss the growing trend of mobile payments. no matter where folks choose to travel or shop whether it be in michigan, the nation, or even across the globe, their smartphones are ever present,

always at the ready, provide direction, daily news, scores, and even make payments. early estimates show for the first time ever more people shopped online than in stores over the thanksgiving holiday. cyber monday estimates are still being tallied, but we're seeing a fundamental shift in how people are buying the goods and services throughout our economy. consumers have more choices ever before about when and where to shop. these choices open up opportunities for innovations to take root and spread throughout the economy. we've seen this sort of disruption throughout this series of hearings and mobile payments are certainly no different. they are impacting how the internet of things and the sharing economy develops. the disrupter series remains important as we work to better understand how the industry impacts job creation and our economy as a whole. mobile payment technologies have opened up opportunities for businesses and individuals alike. so businesses small and large can benefit from these disruptions as we have seen with

a hardware-like square, and software-like mode which make payments easier for small businesses and between friends respective respectively. these are just two examples in an ecosystem that's bursting with growth as more as more americans get smartphones, tablets, and other mobile devices. new technologies in competition are responding to consumer needs. mobile payment innovation is happening all over the country. however, adoption across the ecosystem continues to be a challenge that all businesses in this space are working to address. there a lot of facets to the mobile payment space. i'm pleased today that we're going to learn more about the options that consumers have, particularly how these options can and will continue to improve security for consumers and job creators. i yield the balance of my time to marsha blackburn. >> thank you, mr. chairman. i'm so appreciative that we're doing this hearing today and i thank our witnesses. you all are the experts, and we have plenty of questions that we're going to have for you.

wireless and mobile devices and quick purchases are changing things. this past weekend my 6-year-old grandson got into the app store on my iphone, found something that he wanted to buy, handed me the phone, and said, marsha, you need to pay for this. and of course i did not. but i use this illustration to make a point of the simplicity and also the assumption of our kids and grandkids that it is going to be at the scan of a screen or a touch of a button or with great ease that you're going to be able to make these purchases on the go in realtime paid in realtime and with great convenience and security, and

security. and that is where much of our focus is going to be, whether it's the multifactor authentication or tokenization or the what's next. where do you think we are going with this? because convenience, yes. people want security. they're going to demand it because they want to be able to protect their virtual presence online just as they're able to protect their presence in the brick and mortar relationship with those that they're choosing to do business with. so i thank you for the time that you are going to spend with us today, your preparation in coming to the committee, and i look forward to your thoughts on what's next. yield back. >> gentle lady yields back. chair recognizes the gentleman from new jersey, the ranking member of the full committee. five minutes for an opening statement, please.

>> thank you, chairman burgess. during today's hearing, we will discuss the new ways consumers are paying for goods and services through their mobile devices. at a time when it seems like virtually everything is tied to our smartphones, it should come to no surprise we're able to store credit cards electronically and make purchases by simply tapping our phones at the point of sale. these exciting innovations hold promise for consumers. imagine the convenience of being able to send money instantly to a friend or family member, regardless of the proximity to an atm. for consumers who forget their credit cards in an outing, a mobile peer to peer payment could be the difference between being squared away and an iou. the ability to store credit cards in your phone may also offer consumers some peace of mind that in the event of a lost or stolen card their information is stored behind a password. and a physical card is not compromised.

perhaps most encouraging for consumers, mobile payments can be a welcome alternative for purchasing the goods and services they need. for example, the use of mobile payments has skyrocketed in kenya where access to banking is quite limited. with all these new products that involve consumers' personal information, privacy concerns must be raised. in general, mobile payment apps can access a wealth of personal data through a user's smartphone such as phone numbers, geolocation, and e-mail addresses. and detailed purchase histories. consumers do not know who has access to their information or with whom it is shared. this data may be used in ways the consumer never intended, including by merchants sending unwanted advertising tailored to consumers through their mobile devices. that personal information could also be sold, so consumers' location and other private matters are shared with the highest bidder. and that's why privacy protection should be baked into these new mobile pay applications. and also important that consumers are ensured secure transactions through a mobile

payment system. as with any mobile device or application, digitally stored or transmitted information is hackable. with major data breaches still fresh in consumers' minds, mobile payment users will understandably be hesitant about using an app if there is no protection from hackers who may try to intercept their personal information. it's been made clear through this series of hearings on disrupters, innovation and consumer protection must go hand in hand for these new technologies to flourish. mobile payments present an exciting opportunity to make e-commerce a more seamless experience for consumers. and i look forward to hearing from today's witnesses on this topic. thank you, mr. chairman. i yield back. >> gentleman yields back. the chair thanks the gentleman. this concludes opening statements. the chair would remind members that pursuant to committee rules, all members' opening statements will be made part of the record. we do want to thank our witnesses for being here this morning and taking time to testify before the subcommittee. our witness panel today -- and

we do have a good and great group -- our witness panel for today includes mr. john muller, the senior vice president at global payments policy at the senior vice president at paypal, ms. jessica dekinger, mrs. sarah jane hughes, and mr. sang ahn, chief commercial officer at u.s. samsung pay. we appreciate all of you being with us this morning. we'll begin the panel with you, mr. muller. each of you will be recognized for five minutes for a summary of your opening statement. mr. muller, you're recognized. >> thank you, mr. chairman and ranking member schakowsky, and the other members of the committee. thank you for the opportunity to testify on behalf of paypal. my name is john muller, and i'm vice president of payments

policy for paypal. and paypal has been involved in mobile payments now for 16 years and started with the cutting-edge payments mobile device of its time, which was the palm pilot, you may remember, the personal digital assistant without phone capability, but a very portable device. and paypal was actually built to deem payments from one palm pilot to another. at that point, we quickly realized that more people had e-mail and internet access than owned a palm pilot, but we've now come back full circle to a focus on mobile payments to the point that last year we processed 1 billion payments from mobile devices all around the world. and just in the last quarter of this year, the growth rate

continues and we process 345 million mobile payments. i have some more information on paypal in a prepared statement, so i wanted to shift a little bit and just make a few high level points about mobile payments and where we stand today. one point is payments follows commerce and it follows where people spend their time. very few people, but people on this panel accepted, make a payment just for fun or just to try it out. there's always a purpose behind it and for most of us the purpose is commerce or the purpose might be to pay back a friend. increasingly we're doing our shopping on mobile devices, and we have our mobile devices with us when we're out with a friend or contacting a friend, so it's

only natural for payments to be part of that broader mobile experience. another point is that payment has been mobile for quite sometime. there are few things more portable than paper currency, coins, or a plastic card. what's really new about the new generation for mobile payments is opportunities for all of us in the payment industry to take advantage of what the technology makes available, namely increased security through things like the device identifier or geolocation on the device or biometrics on the device, the thumbprint being the first live version of that, but certainly more to come in that arena. then to add security, add a better user experience better than just paying with cash or a card. things like automatically

recognizing my loyalty program, giving me points, and giving me choice of funding methods. if i have the plastic card, then i have to use that card. if i have a digital wallet like paypal or the other wallets, i can use my mobile device in realtime to switch among all the different payment methods that i have available. so those are some of the reasons why we see the growing popularity of mobile payments. another point i want to make is we often use the term broadly mobile payments and it covers to a large degree three different fields. one -- and certainly the one that predominates for paypal and many other payment companies -- is using the mobile device as a substitute for what a few years ago would be a transaction on

the laptop or desktop computer, so just communicating with a new kind of device, but really very similar to the kind of e-commerce transactions we were doing in the early 2000s. the second type and certainly the one that gets a great deal of attention for good reason now because the opportunity to touch not just e-commerce but physical commerce is using the phone as a substitute for the plastic card and paying at a physical point of sale. then the third type, certainly not to diminish it in anyway, equality important is using the mobile device as a way of enabling businesses, mostly small businesses, to accept cards and other payment methods electronically in a mobile business environment, whether it's a food truck or a farmers

market or any of the other many opportunities that small businesses use for devices, attaching a small reader to their device using it usually to swipe a card or enter another payment method. companies like square and paypal have made that available to small businesses all over the country. and all of those are different types of mobile payments, but it's important to recognize that there are distinctions among the three. and then finally also important to recognize that the field is already regulated. we have to give credit to the drafters in particular of the electronic fund transfer act when they created consumer protections for what at the time was primarily the atm card quite a few years ago.

they drafted the statute in terms of access devices and financial accounts not limited to plastic cards or any other kind of specific technology, so an access device can be a password or a phone or any other device and the consumer protections remain in place supplemented by the zero liability programs that visa and mastercard and paypal all over to buyers. so just wanted to make those broader points and with that i'll conclude my remarks. thank you. >> chair thanks the gentleman. ms. dekinger, you're recognized for five minutes, please. >> thank you, mr. chairman. thank you for the opportunity to testify on behalf of merchant customer exchange. we appreciate the invitation to appear before the subcommittee to discuss the rapidly evolving mobile payments space.

who is mcx? the merchant customer exchange was found by a leading group of u.s. merchants in 2012. members include retail leaders in the big box, convenience, fuel, grocery, quick service, full dining, and specialty retail -- i have prepared a short video for you to give you a sense of what -- >> i think this guy might have just turned off his mic.

>> video? hold on. i think it's going to a video. >> we have great news. currency is now live in columbus, ohio. the people of columbus are experiencing a powerful new way to shop. not only can they pay. they can redeem coupons and gain loyalty points all in one swift move. currency was made to be used at the places the people of columbus go every day like their favorite restaurants, even at the drive-through. >> i'll be paying with currency today. >> okay. great. have a great day. >> they can also clip offers and scan at the check out at retailers and the grocery store and they're good to go. discounts and loyalty are applied instantly.

and they can pay with their phone while comfortably sitting in their car at the gas pump. currency is available on virtually any smartphone and soon you'll see it at thousands of other places around the country. stay tuned. soon you too will be able to shop like never before. >> this new network will benefit a wide range of consumers in three basic ways. one, delivering a better shopping and payment experience by enabling customers to interact directly with merchants through any smartphone. two, safeguarding consumers and merchants by maintaining the direct relationship that merchants have with customers. three, bringing balance to the payment's ecosystem. mcx brings together the best in class technology to create an unparalleled network in the mobile space. mcx has launched currency that