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Reports this week illustrate the yin and yang of the exploding arena of mobile payments: one study suggests that mobile payments will grow to $22 billion by 2011, thanks to technology which will turn your mobile device into a virtual ATM in your pocket; yet other reports cite significant security issues as banks scurry to protect data and dollars as more customers use mobile devices to make payments.

On one hand, Payments News cites a new report by Juniper Research, which reviews the opportunities afforded by “the freedom to bank and make payments on the move.” According to the report, use of a mobile phone for financial services will rapidly revolutionize this sector, much like the ATM did (but which took years before consumers fully adopted such use).

On the other side, Unisys identified five security issues likely to emerge in 2008, the top two of which center on the difficulty of protecting data on mobile consumer devices and the challenges banks face to protect client data and money. The Unisys report suggests that more than 35% of online banking households will use mobile devices for financial transactions by 2010 (Celent study), but there could also be a concurrent rise in e-banking attacks such as phising.

Thus, at the very time when consumers are demanding more “on the go” banking and payment options, the bank sector—already bashed by the sub-prime mess (let alone making earnings, retaining customers and fighting for low-cost deposits)—is facing added costs to build new business-processes and IT protocols to safeguard the ATM in your pocket.