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While the UK experience might not be a paragon of futuristic thinking, as we approach the fourth anniversary of the launch of FPS, no one can deny that "it's been there and done that". Whereas we've been hearing about half-measures like Expedited Payments and Same Day ACH in the USA for a long time without any mainstream adoption to show even 3-4 years later. That regulation is necessary to bring about any change to status quo is clear. But, whether it will happen in a lobbying-driven nation like USA is not. 

For registration-wary readers, here's the Google Search result link for the FT article cited by Robin B.

BTW, written in 2009, why does this article, which is full of innuendoes including its title itself, fail to make any mention that FPS was launched a year before its publication?

@Advait R: Great post! I especially liked your KYC, face recognition and STP analogies. 

@John D:

You make a valid point around the role of technology in risk attribution / mitigation.

However, awareness of risk and how it is handled are highly dependent upon local business culture. Having spoken to many vendors of the type exemplified by Advait R - in the course of pushing retail payment technologies, I must add - I am fairly sure that they will have the following answers ready when the risk of default is pointed out to them: (1) If my customers delay payments, I will keep knocking on their doors so persistently that they will risk losing face with their neighbors and eventually cough up their payments (2) Very few people do such vanishing tricks; even if they do, there will be somebody else in the same house who I can grab to realize my payment (3) Children and grandchildren do most of the shopping for old people, very low chances of default due to natural death; in any case, my risk is limited to one month's shopping and it is bad karma to chase up for such a paltry amount from a dead person's relatives. While I may or may not agree with the form of risk management followed by the vendor, I have to accept it as a given. 

Besides, it's not as though payment technologies do such a great job of risk management. By focusing on eliminating risk of defaults, they introduce other - and arguably far greater - risks viz. potential loss of revenue from shopping cart abandonment, false positives, and so on. While some other technology does come along to solve these problems, we go back precisely to the crux of this post, namely, how the more things change, the more they remain the same. 

Good list. Apart from these, I'd like to add a couple more imperatives for billers:

1. Spread awareness that customers can use Acrobat Reader X to highlight, annotate and save eBills. This can increase eBilling adoption and boost paper turnoff.
2. Take a more holistic view and stop thinking with a binary mindset of either paper or electronic. For various reasons, I prefer printed bills. Each month, I receive a bill of around 10 pages of which 9 pages are taken up by itemized billing of local calls. I really don't want to know about local calls at that level of granularity - in any case, most of them have a 0.00 charge since they fall within my plan's free call quota. I was just wondering, if only I could selectively turn off the itemized list for local calls, the size of my monthly bill would drop from 10 pages to one page, I could "Go 90% Green", the biller could save huge costs in the process. When I called the biller's call center to check if they could offer such an option, they had no clue what I was talking about. When I tried to explain, they cut me off saying, "we can send you either printed bill or eBill", so I abandoned my attempt. By offering and promoting such an option, I can predict that the biller will save far more costs than plodding along with their 2-year long ineffective attempt to move people to eBills and drive paper turnoff. 

Some 8-10 years ago, many document management vendors changed their tune from "paperless" to "less paper". I think it's time eBilling vendors and biller marketers did the same.

Most sales presentations are delivered to prospects in offices with prior appointments - laptops work fine in those situations. However, many salespersons still get the chance to make 1-2 minute pitches to prospects in unplanned and non-office settings in what could be called "water cooler moments", which could also happen in cafeterias, restaurants, tube stations, and so forth. Great salespersons are always prepared for such occasions and can deliver elevator pitches out of memory - no laptop, tablet or notes required. However, a tablet loaded with a canned demo allows even average salespersons to capitalize upon such moments. While this is a powerful use case for the use of tablets, justifying a business case for it might not be easy. "Distribute tablets to a few of your average salespersons and measure the results after a couple of months" would be the most logical pilot but you can imagine the political ramifications when the best performing salespersons are left out of it!

@Pat C:

Thanks again for the clarification. If someone hijacks my account, I thought they effectively have access to all my credentials that really matter. So, unless I'm missing something here, shouldn't transactions initiated by them appear genuine to everyone (except me)? In other words, how can technology stop them from using their ill-begotten access rights?

All through the past 8-10 years, vendors have claimed that their security technologies would inevitably cut down fraud losses as a percentage of revenues. However, I feel that the utter lack of empirical evidence to prove their claims has made a lot of online merchants quite skeptical about any future claims. On the other hand, the potential loss of revenue they suffer every day from shopping cart abandonment and false positives is very real.

Sure, I'll use a mobile wallet in that case. But, while things may - or may not - change in the future, it's currently impossible to pay, collect reward points and redeem a coupon with a single tap, maybe not even with a single app. The way I see it, the hype around NFC-based mobile payment is getting ahead of its true capability. Only time will tell whether people will wait long enough until NFC's holistic vision becomes reality or, in the meanwhile, jump to some other form of mobile payment that works as advertised today - or give up on mobile payments altogether and stay with plastic.

@Pat C:

Thank you for your clarifications. I agree with you that technology can make certain layers invisible, reducing some of the friction as a result. I happen to read an article in Inc. earlier today, according to which the #1 consequence of identity theft in five out of the last five years is account hijacking. I don't know how effective any amount of transaction level security can be against such a threat vector. So, my point re. fraud loss as a percentage of revenue still remains. 

Instead of resorting to such smear campaigns against email, post offices might want to convert the manifold gains brought about by ecommerce to their parcel business into a strategic advantage. Given that postage on a parcel is 5-10X of that on a letter, these gains are not insignificant. Besides, they shouldn't forget that, while some of them languished, others like Deutsche Post capitalized on changing trends and grew from strength to strength. And also that, a lot of people - me included - still prefer to receive their bills by snail-mail only!

More than anything else, the luxury of being a not-for-profit business gives RuPay a real chance at becoming a credible alternative to traditional card networks - after all, it's not easy for a newcomer to match the 50+ years of scale, reliability and quality of Visa / MasterCard / AmEx, charge less and still be profitable. This business model could well prove to be a lighthouse for countries where going cashless has a social angle. According to this LA times article quoted in this post by Brett King, 75% of currency notes in Los Angeles carry traces of cocaine, so even the USA could be one such country. Instead of imposing artificial limits to debit interchange fees on American banks, if only Frank-Dodd-Durbin had mandated the Fed to launch a new card network modeled as a not-for-profit...    

Unfortunately, the multifactor-multilayer-outofband troika for ensuring security increases friction so much so that shopping cart abandonments and false positives arguably impact online merchants as adversely as fraud does. This might explain their C'est La Vie attitude to such reports. Besides, Amazon, and most other ecommerce giants in the US don't even use VbV and other singlelayer-inband measures and I'm yet to come across a single report that suggests that they suffer greater fraud loss as a percentage of their revenues as compared to merchants in many other countries who do.