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Although MasterCard has a vested interest in this survey, its findings do seem to resonate with practices followed by retailers after new interchange regulations were introduced in Australia and elsewhere. I remember reading that Qantas, the Australian national carrier, started slapping a 7.5% surcharge for accepting card payments even though it only incurred a 0.5% cost for processing them. I'm increasingly led to believe that Retailers Want To Have Their Cake And Eat It Too.

There are over 8K banks versus around 1K retailers in the USA. While I don't have equivalent figures for other nations, I'm reasonably sure that most of them have more banks than retailers. So, to answer @PeterR's question, banking would appear to be more competitive than retail! Still, switching costs in retail are negligible compared to banking, so retailers should be more inclined to pass on lower costs to consumers. Post Frank-Dodd-Durbin, debit card fees have dropped in the USA but there's no evidence that retailers have dropped prices so far. Only time will tell whether they do so going forward.

@MAKishenK: Nice article. It stands out by giving concrete examples. Let me add 'credit card realtime fraud detection and prevention' as another use case, which is perhaps the oldest and most widespread use of predictive analytics in BFSI. I'm eager to know if you expect the "false positives" problem to worsen when processing shifts from the present batch / sample data to realtime / big data?

@AlexanderP: At the time GetCash was launched, you and I had concluded that this app would permit non-customers to receive money. I bet neither of us had thought that the term "non-customers" would go this far!

Transaction-level frauds and account hijacking frauds are common. But this episode exposes another type of fraud where the victim / genuine customer neither put through a transaction nor even signed up for the said channel (GetCash). For the want of any standard name that I'm aware of, let me call this "Enrolment Fraud". No amount of transaction-level security will help prevent this fraud. Only a more secure enrolment process can reduce / eliminate it. It seems to me that some amount of friction - e.g. application signed in wet ink, branch visit to prove identity - and a corresponding drop in adoption rate will be an inevitable part of such a process. I don't envy banks their position of having to walk a tightrope between security and convenience on this one!

I was enlightened by this recent article http://ow.ly/emkUz (signup may be required) that e-invoices are mandatory for B2C and B2B, not just B2G, transactions in many parts of LatAm, including Mexico and Brazil. Non-compliance could apparently invite penalties ranging from blocked shipments through to even jail terms.

AmEx spent millions to tell people, "Don't leave home without it!", referring to its plastic card. After all those years and millions of ad dollars, mobile wallet providers need to think of something more powerful than "leave home without it!" to make the man on the street adopt mobile payments.

I agree that banks shouldn't be using the Baby Boomer and GenX prism to view the world that's increasingly populated by the Millennials. However, when it comes to branches, GenY has spoken for itself: 

Young Brits still visit bank branches - they're usually closed though

Over 15 years after it started, e-commerce accounts for less than 5-7% of total retail sales in the USA. Therefore, we've to consider the possibility that much of the connecting, advocating and sharing that social media is so good at is actually driving more people to physical stores.

Self-service for queries, analytics, etc. is much welcome. But, don't you think clients will find self-service for data entry to be a drudgery that banks and FIs shouldn't pass off to them? 

With a spend that is over 10X of the average, I had to follow up today for the fourth consecutive month with my credit card issuer - a Top 5 Bank - to simply send me statements on time. So, pardon my cynicism when I say that card reward programs are meant to incent the cardholder to spend more, so that the bank earns more by way of interchange fees. It's said that switching banks is more painful than undergoing root canal treatment. I fully agree with that view and believe that it provides the strongest building block of retention / loyalty strategies of most banks. 

The question of which card a customer puts at the top of their wallet is obviously an important one but I suspect that it is relevant only for people who have multiple cards in the first place. Many, if not most, such people keep signing up for one card after the other only after they bust the credit limit on each of their existing cards. For that segment, low APR drives the top of the wallet choice of card more than any retention or loyalty building strategy.

A couple of taxi companies in a couple of large metros in India are equipped with MobilePOS and accept credit cards. The passenger pays what's displayed on the meter. The cabbie suffers a 2% processing fee and a 2 day delay in receipt of funds since the payment is routed via the taxi company. Despite such comparatively attractive figures, every cabbie desperately tries to wriggle out of accepting credit cards. I almost got booted out by one of them when I tried explaining the high "hidden cost" of cash acceptance. Which is why I have a good laugh whenever I hear gurus and pundits going on and on about how mobile payments will empower plumbers, handymen and other "micro-merchants" to accept credit cards. Which is also why I'm not in the least surprised by this FED report according to which checks are the only growing segment of P2P payments in the USA.