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Once upon a time, it was said, "New York City Subway crime increased 12% in 2005. But, if you take away iPod related crimes, the crime rate actually dropped 8%." Seven years later, looks like we could substitute iPod with iPhone and the rest of the statement would remain valid.

With NFC, even a proximate card transaction risks attracting the higher CNP interchange. This is one more reason why merchants may not be too enthusiastic about investing in NFC terminals.

PERSONAL (www.personal.com) is just the service you want. I especially like its auto-form fill feature. (Other than being a user of this service, I have no interest in it).

Until there are viable alternatives to banking and card network rails - none have been found in the past 50 years, not sure if one will be found in the next 5-10 years - mWallets merely replace the plastic form factor of cards or cheque / Internet Banking form factor of bank accounts. The underlying funding sources for mWallets remain card or bank account. With their tepid response to NFC terminals, merchants have gotten this long ago. By launching PayTag, Barclays seems to have astutely recognized that a cheap, low-tech, sticker is enough to serve the basic purpose of mobile payments, namely, to pay. Since each phone can likely support only one sticker, the bank can guarantee lock-in with PayTag. On the other hand, since one mWallet can hold credit cards of Barclays and its competitors, it might make sense to leave mWallets to VC-funded startups. For a bank, PayTag is perhaps the end state.

Needless to say, banks have to prioritize funding for innovation initiatives with expected returns, either through fees from customers or incremental interchange revenues, or whatever.

With mobile payments, banks probably know that the reality is quite different from a whole lot of theoretical usage scenarios.   

Let's take the taxi driver example. What do we see on the ground? Despite having mobile POS in their taxis, many taxi drivers quibble about accepting cards. This has not only been my personal experience in some cities of India but also the view expressed in a recent Finextra post about cabbies in Spain / Italy. Fact is, for small businesses like taxi drivers and plumbers, a 2-2.75% MDF is a lot of money and a T+2 delay in receiving their funds is a lot of time. No wonder they insist on cash whenever they can get away with it and don't seem to be sold on the potential of mobile payments to improve their business model.   

Now let's take Uber, the limo service available in San Francisco and a few other American cities (maybe even London by now). It charges almost 2X fares of regular cabs. It justifies its premium by offering, among other features, guaranteed credit card acceptance. Imagine the consumer and regulatory furore that would ensue if banks were to raise their interchange by even 25 bps for accepting mobile payments via self-owned mWallets?

I think banks are doing a smart thing by letting all innovation in many of these spaces happen elsewhere without putting themselves on the frontline. They pocket the same fees anyway.

Most people within the portrayed customer segment - no Internet / email access - tend to use prepaid mobile connections. Those amongst them who have a banking relationship are only likely to have debit cards. In India, for example, prepaid and debit outnumber postpaid and credit by over 10:1. Since there are no 'bills' for the former category, the medium of delivery of bills seems somewhat moot.

SMS-based EBPP could actually be useful for the opposite customer segment i.e. the one that does have Internet / email access and postpaid / credit card accounts. Compared to email / portal based payments, it's much easier to hit reply with a 'YES' to an incoming SMS seeking payment. Since this segment does have a credit card or some other funding source that can be linked to their mobile phones, the payment loop can be easily closed. 

@Antti L:

I think your wish list is quite exhaustive. Apart from #4, I think any mWallet available in the market today (e.g. Google Wallet) supports almost all your other 'asks' when coupled with lockscreen password, which is anyway available on all smartphones.

Perhaps billers continue to beat the 'Go Green' dead horse while promoting eBilling adoption because the alternative - the truth that it saves costs for them - bears the risk that astute consumers will demand an incentive for paper turnoff! Wells Fargo's recent sweepstakes for online-portal-only statements is latest evidence of this practice. So far, Tata DoCoMo is the only biller I've come across that offers 1% discount on Year 1 charges for enrolling for eBills. I'm sure their paper turnoff campaign will enjoy better conversion than all their competitors'.

Nonbank financial services providers essentially fall under the following categories:

1. They expand the reach of banking to those people that banks won't want to deal with directly e.g. SQUARE, Intuit GoPayments, etc.
2. They operate on the fringes of the market and handle less volumes in a year than banks possibly handle in a minute e.g. PROSPER, Zopa, etc.
3. They shoot themselves in their feet with misguided offerings and fade away by themselves e.g. Nokia Money, Google Wallet (?), etc.
4. They threaten to use non-banking rails (MNO billing) when they launch but realize, after a couple of years, that to make big transactions happen, they have to support credit cards / banking rails e.g. Boku, Zong, etc. 
5. They enter a new market that banks have missed, prove the potential of those markets to banks, and are happy to be acquired by banks for a fraction of banks' net worth / market cap. e.g. eCount (Citi), Revolution Money (AmEx), etc.

So, no radical measure is necessary by banks. End of the day, whether they like it or not, most people will trust big money only with institutions guaranteed by FDIC / equivalent aka banks. 

Having just attempted to put through two CNP transactions in a country where 2FA / 3DS is mandated by the central bank, remembering one more password is the least of the friction. There are simply too many moving parts and even if each individually has 99%+ uptime, the end-to-end uptime is a lot lower and transaction failures are not uncommon. In my present example, one transaction succeeded whereas the other failed (because the issuing bank's 3DS was constantly timing out). I'm not sure if the issuer, acquirer and payments processor are aware that this transaction has failed, causing loss of revenue for the merchant. As for merchant, I don't know if he believes in "ignorance is bliss", is patting himself on the back for blocking a potential fraudulent transaction, or is upset with the others in the payments process flow for bungling this transaction. Perhaps, with its renowned use of A/B testing for over 10 years, an ecommerce leader like Amazon has a better idea about the potential of VbV / 3DS / 2FA to trigger transaction failures and cause false positives, which is why it has astutely chosen to avoid such technologies. I'm sure Amazon doesn't like fraud any more than other merchants but perhaps recognizes that fraud is a cost of doing business in the real world. 

Although the latest, the above is not my only experience with false positives caused by existing 2FA solutions. Maybe it's high time the regulators changed their focus. Instead of specifying even higher levels of security, they should insist that existing issues with 2FA are ironed out first and demand proof that 2FA has cumulatively prevented more fraud loss compared to the revenues it has lost due to false positives. I recall a banker saying, "only compliance, no transactions" in a somewhat similar context recently.