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Great post. From my experience of 2FA in India over the last +5 years, I totally agree with you that SCA could cause massives loss of sales due to higher friction in the checkout process as also due to greater risk of failed payments.

I used to regularly pay with credit card online for +10 years before 2FA was mandated for online payments in India around 5 years ago but after 2FA was enforced, I switched to Cash on Delivery or Card on Delivery for all my online shopping in India (although I continue to use credit card outside India).

I wrote about this four years ago in Why I Went From Card To COD. Two years ago, I pointed out that Cash Still Ruled Ecommerce In India.

What about Cashback@POS against credit card payments? 10 years ago, my local ASDA store clerk would always ask "Cashback?" when I reached checkout and took out my credit card. (I never paid with debit card, so I don't know if Cashback@POS was a thing even with debit card payments).

Didn't retailers get any compensation for giving cashback on those instances?

On a side note, going by my personal experience, Cashback@POS did serve as ATM replacement many times. Not sure why MasterCard's Mark Barnett is somewhat defensive about this in his quote in the article. 

@AnonFinextraMember: In the USA, where debit interchange is regulated and credit interchange is not, misclassifying card type can't be very kosher!

Well tried SQUARE. Payments is Financial Services. Totally agree with @AFinextraMember. 

If "cardholders must pay their balance in full every month", shouldn't this be called "charge card" rather than credit card?

Key is Merchant Account. IMO these POS replacement solutions are trying to solve a non-existent problem.

All new credit cards in India are NFC contactless now. Below INR 2K, there's no need for PIN (or signature or any form of payer authentication). I must've used my contactless credit card at nearly 100 merchant establishments so far. While most merchants themselves don't know it, their POS machines are NFC enabled and my below INR 2K payments have gone through in the so-called TAP mode without PIN.

Point is, if the Merchant is big enough for an Acquirer Bank to issue a Merchant Account, issuing an NFC POS terminal is not a big deal. POS replacement is a solution seeking a problem for those merchants.

OTOH, if the Merchant is not big enough to be issued a Merchant Account, POS replacement solutions like these can't enable such a Merchant to accept card payments UNLESS they also act as Merchant Aggregators a la SQUARE and offer a sub-Merchant Account to such Merchants. Are they? Do they?

In India (and China), such micro-Merchants are fully geared up to accepting digital payments via apps (linked to bank account, credit card or debit card) via QR solutions that, leave aside POS, don't need the Merchant to have a POS replacement smartphone like these.

I happened to stumble on to this post today. 6 years later, plastic is still alive and kicking. Apple made great progress in digitizing and tokenizing third party issued credit cards in Apple Pay to minimize the role of the physical plastic card but, when it came to its own card, Apple has chosen plastic - er titanium - for its own Apple Card. Merchants also continue to care only about the card, not cardholder's physical presence at the point of sale. 

IMO, one reason why merchant payment consortia have failed to take off is that they're too inwardly focused on the cost of the existing card network payments and have not bothered to consider why consumers would switch to a merchant based alternative. I don't know a single merchant payment that came out and said, hey, we're cutting out banks and saving MDR, we're passing on the savings by way of reduced prices, so please switch from your credit card to our payment method. Maybe it's only me but merchants have always come across as too greedy - they want to have their cake and eat it too. It's no secret that merchant incurs less cost to accept debit card compared to credit card but I don't know a single merchant who gives a discount to customers paying with debit card rather than credit card.

I happened to stumble upon these comments today. 7 years later: 

• Credit card rails are intact. Visa and MasterCard are very much around.
• Banks continue to be most profitable industry in FORTUNE 500.
• For all their hype, the leading seven neobanks in the USA put together hold total deposit of $1.68 billion, which is just 0.014% of all deposits held in US banks (Source: Silicon Valley Is Eating The Crumbs From The Banks' Lunch).
• Apple has not connected iTunes to bank account or otherwise created its own payment rails. (Actually Apple has killed iTunes).
• Apple didn't bypass banks with Apple Pay. Apple Puts Banks Squarely At The Center Of Mobile Payments
• The new Apple Card is issued by an existing bank (Goldman Sachs) and runs on top of an existing card network (MasterCard).
• Far from iPhone killing plastic, reports are that Apple is planning to use its "plastic" Apple Card to prop up sagging iPhone sales (Source: FORTUNE). 

In short, none of the predicted threats to banking / card network rails seems to have amounted to much even after all these years.

Thank you for highlighting. I recall a few of them. I think "Sample with built in bias" is somewhat similar to the technique I termed as "Pixie Dust Sample" in Beware Of Committing Harakiri By Lying With Big Data.