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When the credit card "no surcharge" rule was repealed, some merchants started charging as much as 7.5% surcharge even though their MSC / MDF cost was only 2-2.5%. Therefore, while I'm aware that interchange is being lowered in Europe, I'm not so sure if that will mean much in actual practice. In any case, credit card still won't make funds available to spend in real time, the way cash does.

Good post. Having spent nearly two decades in various IT companies leading - and being led by - people distributed all over the world, I can easily relate to many of your tips. Keen to know if you've any experience of using new-age enterprise collaboration platforms like Slack, Yammer and Jive on managing remotely distributed teams.

Good question although I'm sure you mean it in jest - after all, without regulators, who will sift through tips from FMCs? So far I've been under the impression that only "insiders" qualified to be whistle-blowers. Thanks to your post, I went over to the CFTC website and learned that anyone can submit tips - or TCRs as CFTC calls them. Thanks!

Bolstered by this new-found piece of knowledge, I submitted my own "TCR" to CFTC. Since it didn't exactly match the type of typical TCRs that are meant to be submitted via its website, I used Twitter! 

https://twitter.com/s_ketharaman/status/705346348925784064

These heists were widely reported at the time, including by me:)

Why Is This Data Breach Different?

The annual US market for prepaid cards is $$$B. Even breakage on prepaid cards is believed to be a $$B market. Compared to that, $55M fraud loss is peanuts.

Mandating more and more security measures leads to more and more friction. That's usually a recipe for disaster - end of the day the purpose a business is to make revenues and profits, not prevent fraud. Smart businesses will never endanger a $$$B market by taking measures that may - or may not - prevent a $$M loss that won't even appear on the second decimal place of revenues. End of the day, any payments business involves the risk of fraud and, beyond a certain point,

Mitigating Fraud Does Not Pay The Bills 

It's not only me.

According to MasterCard / Javelin Research, overzealous security measures have killed 13X more revenues than the amount lost to fraud.

I wonder if the commenter means "eradication of cash" or "irradiation of cash"? Vision is a great thing to have. It helps people muse "Where did it all go wrong?" when reality strikes hard. IMO, the war on cash is failing because it's fought with the weapons sold by self-serving middlemen e.g. FIs who stand to gain fees / data when electronic payment methods are used.

The more pragmatic way to win the war on cash is to acknowledge the imperatives of payers and payees, the two important stakeholders of a transaction, recognize how cash fulfills their needs (e.g. cash is still the ONLY realtime retail payment method that makes funds available to spend for the payee and without dependency on any third party), and devise an alternative that does as well as better than cash and at no higher cost than cash. Any visionaries out there? I thought so, too. To paraphrase Biggles / Thick As A Brick, you won't find any visionaries when you need them for the last transaction.

OMG this is scary!

I'm very keen on knowing what would happen if sophisticated data science techniques are applied on the 1.7B people with mobile phone that are currently excluded from the formal financial system. Will banks uncover new opportunities that they didn't know about before or find out many more to cement their past decision to not serve this market.

Good post. Re. "As the case for cash replacement by mobile payments continues to be over-stated,", I think they've given up doing that. I've seen a spate of announcements in the last 2-3 weeks of using mobile phones to withdraw cash from ATMs without a card. From cash killer to a tool for withdrawing cash, mobile payment has come a long way.

@AlexLetts:

The pleasure is mine! Someone once said, "if I dramatize a bit, it's only to drive home a point". Since I believe in that motto, I see where you're coming from:)

In my experience, sluggishness, head in the sand and all those negative things ascribed to banks are not bank problems - they happen to all companies once they cross a certain size. Just today I was commenting to someone that India's leading cab aggregator has become so big in 5 years that it no longer behaves like a startup e.g. it has totally tuned out customers' complaints about its drivers not reaching pickup locations without 2-3 telephone calls.

At least in India, banks have woken up from deep slumber and retaliate with their own offerings that beat fintech's offerings fairly regularly e.g. HDFC Bank's PayZapp Ends My Bill Payment Woes.

So, an enterprise remains liable for unarchiveable past social media posts even after spending money on buying and implementing an archiving solution. That must be a significant dampener on the business case for an archiving solution.