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@AndresF:

Props for a very balanced post. In a recent Finextra post The Death Of Cash Is At Least 190 Years Away, I'd highlighted the role played by friction in bringing cash back into online shopping in India, even for e-ticket booking and other wholly digital processes that hitherto supported only online payment methods. Despite online payments being free to the customer, cash-on-delivery is still the most popular method of payment in India, even in ecommerce. Against that backdrop, I can readily understand how tariffs imposed on online payments - like in Colombia as you've pointed out - can further distance mobile payments from mainstream adoption.

On another note, I didn't know that there were any success stories of mobile payments or mobile financial inclusion in India. Please enlighten. As things stand, only entities with a banking license can conduct banking, whether on mobile or in a branch. So, under the present regulatory framework, the presence of ~1B mobile phone subscribers does not automatically mean they can all become banked. It's more like, if they're already banked and their bank supports mobile banking - neither of which has anything to do with being a mobile subscriber - then they have the opportunity to become mobile banking customers.

A few years ago, I was involved in the implementation of a leading Identity Management System at a Top 10 global FI. Apart from the one solution on which my company was working, we were aware of 4-5 more IdM systems in use at different SBUs and geographies of the FI. Therefore, when I read in this blog  post that there are hundreds or even thousands of IdM systems per firm, I searched for a definition of IdM and this is what I found on Wikipedia: "Identity management (IdM) describes the management of individual identities, their authentication, authorization, roles, and privileges". This confirms what I'd suspected, namely, IdM excludes identification of customers, counterparties and other entities, which I've known to fall under the purview of Customer Information File (CIF). Besides, this Wiki article lists fewer than 20 providers of IdM solutions. Therefore, I'm not sure if this blog post is expanding the scope of IdM to include CIF.

Customers of all ages and across all times - myself included - have wanted the best possible product at the cheapest possible price and the least amount of headache. But the point is, there are no service providers who are able / willing to deliver such products for many types of payments. Let me take, for example, the very common use case of B2B fund transfer from USA to INDIA between two small businesses, and look at what payment products are available that are not necessarily cheap but are trustworthy and simple to use. Western Union and its equivalents won't handle payments to a business and are ruled out. PayPal tends to freeze merchant accounts arbitrarily and hence is not trustworthy. Wire transfer is not suitable since it's too complex for most SMBs and their community banks / credit unions. Against this very real backdrop, I was forced to settle for cheque - yes, paper cheque sent by FedEx and taking 45 days to clear - to receive a customer payment from USA a couple of years ago. By all counts, this is a huge market waiting to be disrupted. However, I don't know of a single PSP who has been willing / able to do it. Given my personal interest in such payments, I'd love to be proved wrong.

With the proliferation of social intelligence platforms and interesting business models that together expose - in near realtime - brand advocates, feature wishlists, disgruntled competitor customers and so on, increasing amount of actionable insight is already available, thereby enabling banks to take concrete steps to engage customers and go beyond listen and learn.

@KillianC:

I'd rather believe what corporate treasurers do than what they say. And on this, I'll point to my comment here to avoid repetition.

Just to clarify, in the airline COD example I've cited, I don't think the airline has ignored any cost: The third-party COD provider in question bears all the costs you've specified including cash collection, transport, deposit into the airline's bank account, cash-in-transit insurance, reconciliation, etc., and charges one flat fee to the airline, which is no higher than MDF / MSC. For the airline, this is the total cost of getting "cash in its bank account" and I don't see any extra costs being applicable relative to card payment. In fact, at no extra cost, the airline has also received a bank guarantee from the COD provider indemnifying the airline from the possibility of the COD provider going bankrupt during the T+2 day settlement cycle. 

Maybe the COD provider has underestimated its total cost and has quoted an unrealistically low fee to the airline but that's not the airline's problem. On second thoughts, I'll rule out the possibility of any gross underestimation since the same COD provider has been providing this service to at least 100 other OTAs and e-tailers over the last two years and it has managed to survive so far.

No. Moving money is still fraught with several issues around complexity, convenience, security, trust, regulatory compliance, and so forth. Unlike many industries dealing in physical goods, the payments business is far from commoditized. Companies who address these fundamental issues satisfactorily still stand a good chance of achieving fame and fortune. Cost is far from being the sole determinant of success in moving greenbacks. With no disrespect to the retail industry, let me paraphrase the words of a veteran retail IT program manager when he was put in charge of his first ever BFSI project: A few minutes of downtime only means the loss of a few t-shirts in retail whereas it could place the whole bank at risk, especially if it happens close to a payment cutoff.

Not sure why cash collection should be so costly. In this Finextra post, I've cited the example of an airline in India that has recently launched cash-on-delivery as a new mode of payment for booking air tickets. It has outsourced the cash collection to a third-party at a cost that is no greater than the MDF / MSC it incurs for accepting credit / debit card payments.

In these times, we've seen heightened interest for solutions that provide business value while achieving compliance. 

I remember NCR doing something like this last year. As a security boosting measure, this is a solution seeking a problem. While it plugs one arguable vulnerability, it introduces other concerns, as @Jan-OlafB points out. However, if the recipient doesn't need to have an account in the same bank as the sender, this is a highly convenient realtime P2P payment method.

I never knew that bankers thought it was their role to connect their business banking customers with one another but even if this B2B portal helps in introducing this new KRA, it's a case of better late than never. Kudos to RBS / NatWest for this initiative.