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Not sure I'm wildy enthusiastic about having my wallet and transactional information stored on the SIM, even if the SIM security is enhanced, it is still an unneccessary risk.

Surely, it isn't as simple as allowing payments up to €20 to go on customer's mobile bill. There is the whole trust issue (do people really trust the MNOs to handle payments) and there will also be a requirement for a fairly substantial dispute resolution process, which the MNOs will need to deploy and which will be more complex given the large number of pre-paid, non-account customers. It will be interesting to see how it develops.

Secondly, does anyone really want a mobile wallet rather than a central wallet accessed via their mobile, as per the existing payment scheme approach.

Isn't the issue that there is no interest in swapping one legacy system for another, particulalrly when the "new" products are over 10 years old.

The cost and risk associated with changing a payment system is immense and there is contention for scarce resources. Meanwhile, the revenues derived from processing payments is reducing, requiring banks and processors to reduce the cost per transaction, despite cost hikes from vendors.

Surely the best approach is to maintain the proven and reliable legacy transaction processing engine and provide new services by adding to the legacy system. This can be achieved by modifying the current system (slow, expensive, high risk and still requires scare resources) or surrounding it with more flexible technology (faster and cheaper and reduces vendor "lock-in").

To mitigate the cost and risk of migration there needs to be a good business reason and it needs to result in a significant reduction in cost.

Let us not forget, there is also a cost of accepting cash payments - there is no "free" option for Merchants, so they need to make sure that they minimise the fees they are paying by using whichever Acquirer is cheapest for the payment method being presented. This is fine for the big guys, but sadly, the smaller merchants don't have this luxury.

Interesting views - but I'm not sure I completely agree with your thesis. On-line shopping is rapidly increasing, but this is more fuelled by improved on-line shopping experiences and higher bandwidth. I disagree with your views on the banks investing in fraud prevention - I think that much of the growth is despite fraud levels and PayPal is also picking up a significant share of online shopping revenues.

PayPal is also focussed on providing customers with the ability to shop in-store and via their mobiles. Unless the banks get their acts together they will be left behind and disintermediated by their more commercial competitors.

It's a question of risk vs reward. Typically, the card issuers pick up the loss as a cost of business - and they have invested huge sums in fraud prevention tools. Why the outrage - we know cards are prone to fraud and we live with that fact. 3500 people each year are killed in road accidents in the UK annually - but I don't hear you wanting to replace the car!

Interesting, but I can only reiterate that this wasn't my experience when discussing the topic with banks prior to go-live. 

Interesting view, but my experience is that banks focus on fixing existing fraud issues rather than putting in place barriers to prevent fraud from happening in the first place.  It is always difficult to justify spending money to fix a problem that has yet to be quantified when there are measurable losses that can be opposed.

I'm not aware that the banks did much in advance of Faster Payments other than to try and fix the internet banking fraud problems from which they were already suffering.

Er.... the majority of UK fraud is CNP .... which is down to the card not being present.  Not sure how your plan overcomes this obstacle.  Also, given that SIMs are already being counterfeited and phones are easily lost or stolen would you not just move fraud to a new token?