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"...half of (card) fraud victims ... start using more cash". It's quite likely that 2FA and other sources of friction in ePayments will make people ditch ePayments and return to cash / checks. Goes to show that the shift between paper and electronic payments is not as unidirectional as the digerati would have us believe.

I love the way such announcements quick add, "there is no evidence that the data has been misused" as though anyone expects the bank to take too much efforts to collect evidence of misuse! Instead of such vague commitments, I hope regulators compel banks to instead gather evidence that the compromised data is not not being misused.

"These branches are also bringing in several thousand new clients monthly, at a rate three- to five-times faster than in traditional branches,...". This is further endorsement of what has been quite evident on the ground and is increasingly being voiced by analysts e.g. Forrester: "Branches Will Not Disappear, But They Will Change" (http://blogs.forrester.com/auke_douwe_veenstra/12-10-09-is_there_a_future_for_bank_branches).

It was I who said in my previous comment that predictive analytics based fraud prevention is getting at least partially replaced by SMS Alerts! The way I understand SMS Alerts, they are meant to cry wolf over every transaction and leave it to the cardholder to decide which transaction is fraudulent and respond immediately via 2-way Alert and which transaction is genuine and do nothing about it. I agree that it becomes painful for the cardholder to receive so many cry wolf alerts but that can't be helped since predictive analytics, despite being used for at least 5 years in my knowledge, has not reached a level of maturity where it is free of false-positives. Having seen their susceptibility to false-positives in actual practice, I don't share your optimism that they will get more accurate with time. Especially since card authorization - at least for CP transactions - is a realtime process that can't tolerate the processing delay likely to be caused by a more exhaustive algorithm. 

I am aware of many banks - some in India and many overseas - who have been using predictive analytics of the type you have described to prevent a fraudulent transaction from happening in the first place. In fact, I have known this happening well before SMS Alerts, which are relatively a more recent development. As I understand, the problem with predictive analytics based fraud prevention is the high level of false-positives they introduce and the resultant adverse impact on revenue and customer satisfaction. Therefore, many banks have decided to supplement / substitute fraud prevention with SMS Alerts, where the customer is in fuller control. 2-way alerts make them actionable, which was the context of my previous comment.

In this post, I'd hoped that banks would implement actionable SMS alerts such that, say, a cardholder receiving a transaction alert can reply with a simple "STOP" message to block a fraudulent transaction. I'm keen on knowing whether you've come across any banks, especially in India, that have implemented such 2-way SMS Alerts.

As I'd pointed out earlier, barring a few exceptions like Boku and the PayPal-owned Zong, most service providers continue to use the existing card / banking rails for mobile payments. This is either because of regulation (e.g. India) or the infeasibility of creating alternative rails to match card rails that have been around for decades. As long as the status quo continues, adoption rate for mobile payments is restricted to the number of Card / Internet Banking / Mobile Banking accounts. The billions of mobile phone subscribers doesn't really mean much. For example, while there are some 600M mobile phone subscribers in India, only around 20M qualify to use the recently-launched Instant Mobile Payment Service (IMPS).

I agree with PayPal: Moving the form factor of credit / debit card from plastic to a mobile is neither solving a pain nor providing a gain. Now, it would be a different matter if mobile payments bypass the card networks and banks altogether and work on MNO billing or some other alternative rails. Boku, Zong and a few others are doing this but, with transaction fees as high as 20-40%, they've only been able to make limited headway in virtual goods and other high-margin items. I doubt if they'll ever gain mass adoption in the mainstream market where merchants are complaining about the relatively measly 2% interchange fees charged by card networks.

Nokia tried mobile money in India and gave up. Vodafone never got past its single-state pilot for its M-Paisa mobile payments service in India, despite achieving blockbuster success with M-Pesa in Kenya and a couple of other markets in Africa. The country's largest MNO is currently on its third attempt with mobile payments. Just the title of this FT article explains very well why India is not a promising market for mobile money:

http://blogs.ft.com/beyond-brics/2012/05/28/mobile-money-kenya-good-india-bad

A doubling of installed base is the most obvious area of growth for service providers. A less obvious, but potentially more lucrative source of revenues lies in the relatively large number of transaction types catered to by ATMs in India. It's common for ATMs to go well beyond their traditional role as cash dispensers and balance inquiry terminals to support ticket booking, P2P remittance, religious donations, mobile top-up and many more value-added features.