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Excellent question. I know at least one answer to it that lies in the vendor selection process: The buyer announces the project as a compliance initiative (e.g. FPS). All bidders bid for a solution (e.g. XYZ product + extensions + customizations), implementation of which will lead to compliance. Inevitably, some bidders can't persuade the buyer that their bid can meet the compliance deadline and drop out of the race. Of the handful of remaining bidders who can demonstrate capability to meet the deadline, only a handful are able to show how their bid can add business value (e.g. move reconciliation functionality from mainframe to new, open system, thus cutting costs and improving profits) in the course of achieving compliance. Most often, the contract is awarded to one among this handful of bidders, and the stage is set for the buyer to achieve improved business results through a project that is conceptualized and funded as a compliance initiative. I've seen this happen on many occasions, one of which I've used while providing the above examples. This is perhaps how, even in highly regulated industries like banking, technology does often bolster business results.

Both SQUARE and iZettle obviate the need for merchants to get an acquirer account from their banks and still permit them to accept credit card payments. For this service, SQUARE (and maybe iZettle) charges 2.75% fees as against lower direct credit card MDF of around 2%. A merchant with a non-EMV POS (conventional, not SQUARE) in the USA already has an acquirer account, enjoys lower card acceptance cost than possible with SQUARE (and possibly iZettle), will get an EMV upgrade from current POS vendor if and when EMV happens in the USA, and is therefore unlikely to find strong enough reason to switch to iZettle just for EMV. 

As for Europe being a massive market for iZettle, that depends upon the size of the following use case that forms the bedrock for iZettle and other SQUARE-equivalents: (a) Consumer wants to pay by credit card, (b) merchant wants to accept credit card, (c) merchant goes to bank to get an acquirer account, (d) bank considers merchant's risk profile as high and rejects merchant's application, (e) hence merchant goes to iZettle and is able to accept credit card payments. 

According to many reports, (a) is smaller in Europe than in the US. Having personally encountered a big box retailer in Germany offer a co-branded credit card but refuse to accept it in its own stores - apparently it uses its credit card only for branding - I'm personally biased into believing that (b) is also smaller in Europe than in the US. 

Against this backdrop, it's going to be interesting to watch how this market unfolds.

If we take the "General Merchandisers" category - to which WalMart, Target, Sears and other retailers belong - in the latest FORTUNE500 list, the total revenues is US$ 661.483B and total net profits is US$ 20.061B i.e. 3.03%. Counting out loss makers like Sears and JCPenney, the average net profit percentage is even higher. Using a quick search command in the IMAP report referenced above, the only mention of profit and 2.4 percent I could find was in the line "Profit margins of the 200 largest retailers in the world fell to 2.4 percent...", which I'm inclined to take as net margin, rather than gross margin. Just as with employee, healthcare and other costs, it might be reasonable to expect credit card fees to be in lockstep with gross margin, but there's no such connection between these costs and net margin. In any case, I haven't come across a single alternative ePayment method costing brick-and-mortar or online merchants less than credit card @ 2% MDF. I'm counting out debit card since it is not a form of alternative payment.  

At the risk of going slightly off-topic here, I can't help pointing out what happened in the aftermath of credit card regulations in Australia: Merchants (e.g. Qantas) started levying 7.5% surcharge for accepting credit cards when the regulator had brought down credit card MDF to 0.5% and repealed the "no surcharge" rule.

Technology is currently available to enable banks - and other types of billers - to craft offers ("TransPromos") at an extremely granular level and target them at a "customer segment of one", as I'd pointed out in my Finextra post Save Costs But Lose Revenues With eBills And eStatements. Bank of America is one bank that has publicly announced its plans of making such offers using currently available technology.

The original article had terms like "others" and "children". To me, "Others" means, well, "others", meaning people who had accounts in some other banks, unless otherwise specified, and "children" means too young to qualify for a bank account. Besides, generating a code and calling up the intended beneficiary to convey it - "out of band" of sorts - is how Western Union and ICICI Bank apps work. Which is why I felt that this service from RBS/NatWest permits P2P transfers to non-customers. However, after seeing no mention of non-customers on their website, I've my doubts! 

ATM and POS transactions, system logs, error messages, card spends - big data of this nature has been around for a long time in financial services. Added to that, there's now social media mentions and many other sources of big data. Vendors of big data solutions - e.g. Twitter Sentiment analysis - need to demonstrate to financial institutions that their technologies can be used to store and process big data to deliver actionable insights rather than lead to "analysis-paralysis". It's also incumbent upon them to show how their technologies can filter out the "big noise" that's inevitably a part of big data. Continuing with the same Twitter Sentiment analysis example, less than 10% of tweets about a company / brand have relevance, so the Twitter Sentiment analysis solution must be capable of not only figuring out the 90% but also discarding them so that they don't clog the system resources. 

While in-app payment does make the process more seamless, the merchant will have to give away 30% of the transaction value to Apple. This could prove a dampener for this API.

Hope someone from RBS / NatWest will clarify. Their website for this service, GetCash, is silent on this point. 

The "get cash to others" is a compelling use case (assuming that "others" don't need to be customers of RBS+NatWest). In short, this service seems to permit realtime P2P money transfers from an RBS+NatWest customer to a non-customer who can cash-out simply at an RBS+NatWest ATM without having to have a smartphone, scan a QR code, enroll for a service, or otherwise jump several hoops. So, this service is painless. It's too time-consuming to crack a 6-digit PIN by brute force. In any case, the ATM is subject to video surveillance. So, this service is also secure. Props to RBS+NatWest for launching it. I'm sure it will have many more usage scenarios than parents-children. 

@UriR:

Great pair of websites. Thanks for profiling them!

After a very quick and dirty test with a couple of passwords, I've jumped to the following conclusion which fellow readers might want to accept on faith or reject outright: Passwords in foreign (i.e. non-English) languages are impossible to crack, though easier to remember (in case you know only a few foreign words).