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Personal experience and anecdotal evidence show that, a couple of months after buying a smartphone, the novelty of apps wears out and most users use their smartphones for most of the time for email, SMS and social media updates, for all of which QWERTY is any day superior to touchscreen. Still, whatever happened to BlackBerry happened. This just goes to show that it's extremely important for a brand, especially one that is targeted at consumers, to resonate powerfully with the Zeitgeist, even if it's only fads.

@GaryW + 1.

Had I read this post earlier, I wouldn't have left this comment a few minutes ago. Kudos for this article. In the past 7-8 years that I've been involved in SEPA closely - including helping a Top 3 UK bank go live with SCT on the first deadline in Jan. 2008 - this is the first article I've come across that communicates the benefits of SEPA to corporates so succintly. Most others resorted to the subtle threat, "if you don't do SEPA, you'd have to cough up huge payment message repair fees", which is unlikely to work with corporates who have heard many threats like that before.

ICICI Bank in India launched a Facebook App around a year ago. 

https://www.finextra.com/blogs/fullblog.aspx?blogid=6187

Is this in addition to slapping the higher CNP interchange rates on CP mobile wallet payments?

Not surprising. I hear corporates asking what's in it for them and no one to answer their valid question.

With an outflow of 1.5-2% MDF / MSC for accepting cards - contactless or otherwise - and no tangible outflow for cash, it'd be a tough decision for the C-Suite of any retailer to direct their frontline staff to proactively move their customers away from cash. Not surprisingly, I've never come across a single retailer / merchant who has encouraged me to pay by card instead of cash. At most, we can expect a retailer to ask the customer who's anyway paying by card to select a contactless card instead of a non-contactless one since the former is convenient for both parties. Mobile wallets face an even tougher challenge: Despite the payer being physically present at the point of sale, transactions made with mobile wallets risk attracting the higher interchange applicable for Card Not Present transactions.

First, it will be lack of data. Then, it will be wrong format of data. At last, it will end with too much data. There's no way such frauds can be detected before the fact unless they carry a placard advertising themselves as such. This is not so much a reflection of the capabilities of surveillance agencies as the innate complexity of CDS and other structured financial products. Just struck me that the card industry hasn't achieved 100% foolproof fraud detection before the fact despite such systems being in existence for over a decade and the relative simplicity of a credit card transaction.

@EricS: 

(It's 'Ketharaman' BTW).

Talking about unbanked, there's no risk of using a mobile app "stealing every penny from your bank account" since there's no bank account in the first place. 

If you're referring to M-PESA type of mobile wallet, it's a closed-loop, prepaid method of payment. The mugger can only make the victim transfer whatever money the victim put into that account before getting mugged. I don't see this as a great risk. 

While risks to the customer stem from various factors, the real risk posed to a consumer by a mobile banking service would be if the said service could pull out money from a credit card and / or bank account on demand and permitted P2P transfers to anonymous mobile numbers, especially cross-border. I can't think of a single service like that but I could be wrong.

I admire Mr. Andy Chalklin's clairvoyance (not just iPhone6 but NFC on iPhone6), optimism (mobile wallet payments are not subject to chargeback) and supreme negotiation skills (getting a 50% discount on interchange for mobile wallet transactions, especially when MasterCard has just threatened PayPal, GW and other mWallet providers with additional charges on top of existing interchange fees). Maybe he knows something the rest of us don't.

@EricS:

Since you'd written only about mobile banking apps, I specifically didn't bring in P2P apps. If you're referring to Barclays PingIt type of mobile app, they continue to be A2A, just that they add a layer on top which uses mobile / email as a proxy for a/c #, sort code, etc. By no stretch of imagination are they anonymous.

Study after study has shown that people ascribe different strengths to different channels and that there's a strong case for coexistence of multiple channels working together to deliver omnichannel banking (more on that in my personal blog if you're interested). "Adding Payee" is not exactly the strength of mobile banking. Too many keystrokes, not done so often that it must be done while coming home from nightclub - these factors inhibit this transaction on a mobile phone, whether secure or not. So, security is not the deciding factor. 

While I can't cite any studies in support, I'm sure most of the 5M+ subscribers of Mint and BillGuard do have a locked door in front of their homes. Point is, perception of functionality-versus-security varies from channel to channel.