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Re. "Without a bank account, one needs to create alternate storage of funds with a unique identity for the customer.", who will provide deposit insurance for the alternate store of funds? I doubt if people will keep their money in an uninsured account at a VC-funded company that can shut down anytime, leaving them high and dry.

When credit cards were invented, they were meant to replace cash by being as easy to use as cash. If, in the process of fulfilling that goal, a credit card is misused, then the issuer bank is required to reverse the charge, no questions asked (and recover it from the merchant, subject to certain conditions).

Over time, the basic purpose of credit cards has been subverted by banks who have flipped the issue to security by layering up more and more security measures, which make credit cards inconvenient to use and / or introduce risk of failed payments. By making cardholders value security, and by increasing security, banks have coolly transferred their fraud protection liability to cardholders.

It might sound counterintuitive but the more secure a credit card is, the more liable the cardholder is for fraud and the more scotfree the bank goes in case a fraud happens.

Ergo, if my understanding of the raison d'être of credit cards is correct, *ALL* credit card payments should happen without PIN or any other form of authentication. Kudos to contactless cards for fulfilling at least 40% of that goal.

"...puts its faith in the ability of bricks-and-mortar and the human touch to win over new business."

Four years after I wrote this post, better ability of banks to sell at branches continues to be the Secret Of Survival Of Bank Branches.

From personal experience and anecdotal evidence, PayPal is notorious for freezing customers' wallet accounts for "suspected fraudulent behavior" the moment customers initiate transfer of funds from their PayPal wallets to their bank accounts. As long as the funds remain in the wallet, PayPal doesn't seem to suspect any fraudulent activity nor have any problem with taking a cut of the payment towards its fees. Keen on knowing what happens to the count of frozen accounts on the back of this instant transfer feature; also whether the "instant" refers to money reaching the bank account or only to the ability to initiate the transfer to the bank account. For many years, in India, PayPal is required to automatically transfer wallet balance to the linked bank account within 24 hours of receipt but the good funds can be sighted in bank account only after 1-2 days.

@PaulDawson + 1 re. tone. One update I posted to the original post on my company blog relates to a best practice on tone / language viz. obfuscate relevancy. But that was in the context of the retail industry and I'm not very sure if the same guidance will work in finserv.

I also noticed another update that I'd posted re. estimating the value of a personalized comm to the customer. It'd be challenging for an FI to strike the right balance of the various parameters in McKinsey's formula in order to deliver a personalized comm whose value exceeds its creepiness factor. 

Going by the example I covered in my post Banks Will Know Chipotle Is Going Bankrupt Before Chipotle, the same customers who love targeted offers from the Amazons and the Ubers of the world seem to get offended by them when they come from banks and financial institutions - even when they opt in to them. Ergo, IMO, finserv providers might want to be quite cautious about delivering personalized comms.

@PaulDawson: Thanks but when I created it, I'm sure the description under "Career Profile" was complete although I see that it's now truncated at 300 characters. I'm not the only one one. You can see the career profile of another member also truncated midway, also at ~300 characters. I couldn't find a way to edit my career profile. Let me check with Finextra how to do that and fix this problem. Thanks again for bringing it to my notice.  

Nobody forces MVP users to use a buggy MVP. They know exactly what they're getting into when they sign up for an MVP. They still do what they do because they're the Innovators and Early Adopters on the Technology Adoption Life Cycle who crave the bragging rights that come with spotting the next Google, being the first to try out a new product, and shaping the next blockbuster product by contributing to its roadmap. There's nothing unethical about a tech product - e.g. ERP, CRM, Invoicing, etc. - following the approach of fixing mistakes based on MVP users' feedback.

Now, coming to Theranos, I think it's a tech-enabled blood testing company, not a technology company. Just as I think Google and Facebook are tech-enabled media companies, not technology companies. But, going by the popular narrative where Google and Facebook are hailed as leading tech companies, I'm in the minority. Therefore, again, there's perhaps nothing morally reprehensible for Theranos to fix mistakes based on MVP users' feedback.

But that's not all it did. Going by what I've read about Theranos, the company didn't have an MVP at all. It used conventional equipment to test blood samples of its Early Adopters. That's outright fraud, not use of Lean Startup methodology. 

On a side note, according to Wikipedia, John Carreyrou is from Wall Street Journal, not Washington Post.

Best wishes to JaJa. At last, here's a fintech that sells what consumers want to buy. 

In another post by this same author, I'd inquired if Canada didn't have electronic fund transfer methods like NEFT (India) / FPS (UK). Since I didn't get any reply, I did a quick-and-dirty poll of a few of my contacts in Canada. I heard that they rarely use cheques, instead they use Interac EFT service frequently. A few days later, there was an article on Finextra that confirmed my anecdotal evidence about Interac's popularity in Canada. But all that shouldn't come in the way of shilling products for imaginary pain areas.